Need to consolidate my pensions and open a SIPP

deepam

Hi,

I'm looking for advice on which company to choose for opening a SIPP. Should I go for a DIY option or a ready-made portfolio? I don’t have much experience with DIY investing, but I’m worried that a ready-made option might not have my best interests at heart. Any thoughts?

El_Torro

I’m not sure what you mean when you say that a ready made option may not have your best interests at heart. It will most likely have more expensive fund fees than DIY, though the fund managers still want you to make money so that you don’t sell and go elsewhere.

DIY can be very simple if you want it to be. Choose a multi asset fund with the appropriate amount of equities and bonds, then you’re done. If you choose to do this it will certainly be cheaper than a platform which holds your hand a bit more. Both ready made portfolios and DIY funds are at the whim of the stock market, you will need to be happy with volatility regardless of which option you take.

There are plenty of DIY platforms out there. I use Hargreaves Lansdown and AJ Bell, neither of which are on the cheaper end of the scale. It depends on how much you have to invest and how often you plan to trade, this will influence which is the best option to go with.


Regardless of which route you take it’s worth doing some research into investing so you know how your pension is invested. 

deepam

El_Torro I am reading up on AJBell. Thanks for the heads up on DIY - I will try that. 

singhini

deepam said:

Hi,

I'm looking for advice on which company to choose for opening a SIPP. Should I go for a DIY option or a ready-made portfolio? I don’t have much experience with DIY investing, but I’m worried that a ready-made option might not have my best interests at heart. Any thoughts?

Things to consider other than looking at investment options - 

- Access options (how do you want to access your money when you retire and does the SIPP company you choose allow that option i.e. things like is flexible drawdown allowed or just annuity. How are lump sums dealt with etc...).
- Fees and charges (annual management fees, set up fees, withdrawal fees etc.....)
- User interface and customer service (ease and speed of withdrawals etc...)

ali_bear

For the pension platform (SIPP provider) you want to look at the features on offer and the platform charges. 

How you should invest within the pension depends on the number of years to retirement, whether or not you are still paying in, and your attitude to growth//risk. 

MallyGirl

The platforms for DIY tend to charge either on a percentage basis eg HL or a fixed fee basis eg II (Interactive Investor). For lower value the percentage will work out cheaper but at a certain point the fixed fee becomes the cheaper choice. There is a comparison put together by Snowman which I will try and find a link for. 

Then you need to choose your investments. For a beginner you could just choose a multi asset fund at a level of risk that feels right. Some examples of this are:

• Vanguard Lifestrategy - the 'flavour' indicates the proportion of equity in the fund which has some correlation to risk eg LS 60 is 60% equity. 
• HSBC Global Strategy - the name gives an indication of risk eg Balanced, Dynamic 

There are obviously many others.

If you fancy some reading then the link below discusses the 2 funds above (and so much more)
https://forums.moneysavingexpert.com/discussion/6067313/hsbc-global-strategy-vs-vanguard-lifestrategy/p1

tacpot12

I started my DIY investment learning by copying/replicating the investments I held in my existing pensions. As I learned more, I felt able to tweak my investments until I became confident enough to make major changes. I think the suggestion that you choose a multi asset fund at a level of risk that feels right is a goodd one. You can consolidate your pensions, and you will pay very low charges which will help replace some of the 'extra' return that might be available with a more sophisticated portfolio. 

I use AJ Bell for my SIPP and have been happy with the service and charges.  

Albermarle

deepam said:

El_Torro I am reading up on AJBell. Thanks for the heads up on DIY - I will try that. 

So whereas with Aj Bell , you will pay 0.25% plus the fund fee ( anything between 0.1% and 1.5% )
With say Nutmeg I think you pay about 0.8% all in along with some very basic advice on what to invest in.

Plus you can transfer a SIPP from one provider to another at a later date very easily, so your first choice is not that critical.

On the other hand even though platforms like AJ Bell , HL. Fidelity etc do not offer free advice, if you look at their websites there is guidance on what ready made funds they have on offer.