Is anyone using LV SIPP for flex drawdown - feedback

fijamez

I’m looking at retiring next year at 56.  I have a couple of small DB that won’t kick in until I’m 60 but a meaningful DC pot with my employer but need to transfer to be able to access flex drawdown

i am speaking to a couple of advisors 

1 has very high fees for both transfer and on going management - recommends Aviva platform

the other has a deal with my db scheme and offers lower fees and capped ongoing management at 5k (materially cheaper for me). They are looking at LV SIPP

Does anyone have experience of using either platform in practice and any real life feedback

dunstonh

1 has very high fees for both transfer and on going management - recommends Aviva platform

No one single platform is the best.  If you could build your perfect platform, you would take bits from so many different ones.  Platforms are a bit like supermarkets.  Some people feel comfortable with one whilst others feel another is better.

 Aviva is ok but its front end is frustrating and lacks functionality that others have.   Some people wont need certain functionality, so that may not bother them.         Aviva in default terms is not that well priced but Aviva have thrown around a lot of special pricing terms and sometimes, that can result in good pricing.    Aviva doesn't support tiered or capped charging.

the other has a deal with my db scheme and offers lower fees and capped ongoing management at 5k (materially cheaper for me). They are looking at LV SIPP

I have no experience with LV but that it partly because it doesn't appeal to me.    It is effectively a personal pension using a small range of own brand insured funds but offers fund supermarket functionality(i.e. not full SIPP but not far off) by giving access to the Aegon platform or the Fidlity platform.  That bolting on of functionality is, at least in my head, unattractive.  I have seen bolted-on functionality elsewhere and never liked it.   However, I repeat that I have no experience with LV's way of doing it. 

Charges are mid to upper end.  And for me, a key issue is that the LV charge is higher than the Aegon and Fidelity platforms.  So, why pay more for the LV platform with those bolted on than going directly to them (or a lower cost alternative)?

In my view, the LV product only really works if you are going to invest in LV insured funds or the smoothed managed funds(which I am no fan of - Smoothed funds are like marmite.  You either love them or hate them).

Ultimately, both options can fulfil their intended purpose.   But which is best or whether there are others that are better will depend on your needs, objectives and the preferences of your adviser.

In the last State of the Nation publication by the Lang Cat (the larger of the research publications):   LV= was used by 20% of advisers.   However, just 1% of advisers use it as their primary platform (joint bottom with James Hay).   It had a respectable 24% as secondary (possibly for the insured or smoothed funds) and 75% had it as legacy (legacy is where they used to use it and still have clients on it but no longer do for new clients).

Aviva was used by 56% of advisers.  21% had it as their primary and 31% as secondary.  48% had it as legacy.

Legacy is the interesting one as it means 75% of those who used LV no longer do so, and 48% those who used Aviva no longer do so.

Albermarle

fijamez said:

I’m looking at retiring next year at 56.  I have a couple of small DB that won’t kick in until I’m 60 but a meaningful DC pot with my employer but need to transfer to be able to access flex drawdown

i am speaking to a couple of advisors 

1 has very high fees for both transfer and on going management - recommends Aviva platform

the other has a deal with my db scheme and offers lower fees and capped ongoing management at 5k (materially cheaper for me). They are looking at LV SIPP

Does anyone have experience of using either platform in practice and any real life feedback

Have you thought about not using an advisor and DIY your pension?

There are many good low cost DIY pension platforms you could transfer to that offer a modern flexible drawdown facility.

Of course you have to make some of your own decisions about investments, withdrawals etc.

fijamez

Thanks both - I have to transfer out of my work scheme to allow flex drawdown 

I have had a look at a couple of platforms (ii and aj bell) as I have been managing my fund selection within my dc scheme

I think I just want to get someone to help with the admin of drawdown to start with so am probably going with LV. Initially as fees for transfer are lower and the capped management fee means it’s less than 50bp for that part of the service

think I’m going to give them a go and see how it does and if I want more control or wider funds range look at switching in a couple of years

the other advisor just wanted to build assets and stop me spending it to keep their AUM high!!

jaybeetoo

I don’t understand why you’d pay someone to move your pension.  You can do it yourself for free.  It’s not hard.  The platforms you move to will do all the work.

gm0

For transfer - it's a money value of time question.  The process is dull. The admin a bit slow (in some cases).  You need to be confident in the terminology.  You only do it once.  So learning it is not for everyone i.e. those who would rather be doing something else.  But the cost of outsourcing this is often quite high.  And it is worth working that out.  And considering the value achieved vs free.  

I do not regret doing my own transfers.  The opportunity cost should I change my mind and choose later to get advice is zero.  As the transfer cost was 0.  I was fundamentally unwilling to spend 0.5% or 1.0% of my pot to have someone do the very small amount of work required to process transfers.  I was also happy to receive a large cashback (essentially the first few years platform fees from the consumer DIY SIPP provider.  Reducing the cost drag from platform fees still further.

I also concluded that I didn't want to be guided to somebody's pet platform - preferred by them based on the services offered to *them* as the indirect channel.  Rather than being a better portfolio (performance per unit risk) or a cheaper portfolio for *me* the end customer.   If they couldn't articulate why I should like the proposed platform and portfolio in terms of benefits to me and my goals. Compared to widely available consumer options. Then why would I buy that.  The more expensive bag. With very broadly the same sugar in it.  And no way to know which slightly different sugar would do better or worse in unknown future events.

My taste test "advice" experience was unconvincing in this regard on both cost (where it was OK but no better than that).  0.3% setup w/o ongoing.  0.8% with.  And the portfolio option suggested was absolutely fine per my general objectives.  But no more than that.  Nothing special at all. And nothing I could not just go and buy from half a dozen direct channel providers.  One advice experience is just anecdotal of course.  But templated and risk tiered portfolios are commonly used - for good reasons that suit both consumers and the industry.

The advised platform offer - was also (slightly) more opaque (to me) in terms of underlying investments.  Less clarity. More "trust us".  And for me "opaque" is in general a defect. Not a feature.

FCA "Suitable" (for end customer goals) isn't the same as "better" or "the best".  It just means "not wrong or broken" for the stated goals and risk attitude from the fact find.  A much lower bar.  And the work required for each customer by the adviser and the features of the platform to support the advice journey i.e. their costs to provide ongoing attention within the 0.5% (or whatever) - absolutely play into who likes what.

Of course - I do not believe DIY is cheaper (or more expensive) than advised on platform and FMC.  It is basically equivalent and overlaps a lot.   You can DIY cheaply or expensively based on the features (and funds) you want.  And fundamentally how "passive" you are.  A fidelity etf (platform capped at £95 for any value and 0.10% can be done (and with timing in year - cashback covering trade costs and the first few years platform fee).  

But that would be (for me) an oversimplification and concentration (of limited fund use) too far.  So I do a bit more than that to build my portfolio and spend a bit more.  

Building a portfolio (confidently) is as complex and long winded and data rich as you choose to make it.  

Emotional response to uncertainty drives behaviour in preparation and ongoing.  You want to eliminate that from the running of the plan in terms of bad actions in a panic.  So you need a good enough plan FOR YOU (capitals deliberate) to stick with it.  Or you hire someone to hold your hand.  In that case - hopefully that decision on who it was and their trustworthy nature and ability to help you stick the course when things get rough.  Will work out.  I did not have much more confidence in picking the "right" adviser than I had in picking an appropriate portfolio.

Yes - some advisers have good deals to offer the cost focused.  And others (wealth manager/FA types) do not in general offer nice prices.  

The ongoing advice fee - be it 0.5% or so - is what it is - for help with family, tax monitoring and planning.  If your affairs justify it.  Yet it's a luxury good.  10% of initial pot over the life of a long pension journey (40yr). Plus the initial and transfer charges.    

My take having done it is this.

The work to pull (some of) an old DC pot across to Fidelity and some to another platform was trivial.  
Without getting into why I did that (but I have posted about that before)

The preparation to be confident was more work.  So I knew what I wanted to do (to my own level of required diligence and detail). Engineer mindset. 

The portfolio build is a bit harder than transfer depending on how difficult you choose to make it (objectives, diversification, non-equities elements).  

Ongoing risk awareness and monitoring is arguably more difficult than any of the setup tasks.  But the risk you are taking is a function of the portfolio you choose.  (And providers and currencies etc.)  So what you need to do also varies. Up or down.  This can be a design objective too.  Low maintenance.  Lowering the probability of a single surprise/problem causing you major issues.