Best way to compare pension funds for long term growth?

Alexland

itwasntme001 said:

My one and only workplace pension scheme offers funds at signfiicantly cheaper expenses than the retail market and there are no platform fees either.  All paid for by my previous employer

You are very fortunate but I don' think that's the case for most posters here and certainly not for the OP paying between 0.3 and 0.75 for theirs.

itwasntme001

Alexland said:

itwasntme001 said:

My one and only workplace pension scheme offers funds at signfiicantly cheaper expenses than the retail market and there are no platform fees either.  All paid for by my previous employer

You are very fortunate but I don' think that's the case for most posters here and certainly not for the OP paying between 0.3 and 0.75 for theirs.

Yeh I didn't actually realise until I started taking my finances more seriously 7-8 years ago.  My equity index trackers have TER of around 0.08% and index linked bond fund around 0.07%.

kempiejon

Zerforax said:

Yes paying more for better performance makes sense but I guess we don't know or can't control performance!
I guess the blended charge would move from currently at 0.375% to 0.51%. My combined pension pot is a large amount hence the £400 annual increase by moving all to Pot 2.

If all we can control is charges then as I said moving to an area of higher charges when we know there is no way to predict future performance seems a wonky idea. 0.375% to 0.51% is a big increase, I make that 25% odd extra charges but for what benefit? Paying a higher percentage fee as the pot grows is giving even more to the more expensive provider if you go with pot 2.

I use Hargreaves Lansdowne as one of my SIPP providers and their fees are 0.45% capped at £200 per year, AJ Bell have my ISA but I looked at their SIPP, charges are even better 0.25 capped at £10 per month. So a £400 increase is an awful lot but will sting less if you get that markedly better performance

Alexland

kempiejon said:

I use Hargreaves Lansdowne as one of my SIPP providers and their fees are 0.45% capped at £200 per year, AJ Bell have my ISA but I looked at their SIPP, charges are even better 0.25 capped at £10 per month. So a £400 increase is an awful lot but will sting less if you get that markedly better performance

Or even better Fidelity cap at £90pa on exchange traded assets and it's even capped across all accounts with an allocated Wealth relationship manager for those holding over £250k. Mine was really helpful in arranging what needed to be done with their various departments for my pension sharing order for no extra charge (my workplace pension wanted to charge £1k so I didn't share that one).

FatherAbraham

Zerforax said:

FatherAbraham said:

Zerforax said:

Anything else I should be considering? 

Volatility

Both have followed similar trajectories relative to what the markets have been doing.

Hallo Zerforax,

I'm afraid that's not volatility, but tracking error. 

Volatility is a measure of the deviation from the notional safe return rate.

I was intending to imply that your risk-adjusted-return might improve if you were to optimise it, which would mean considering not purely the rate of return in isolation. 

I may have been too terse.

Warmest regards,
FA

kempiejon

Alexland said:

kempiejon said:

I use Hargreaves Lansdowne as one of my SIPP providers and their fees are 0.45% capped at £200 per year, AJ Bell have my ISA but I looked at their SIPP, charges are even better 0.25 capped at £10 per month. So a £400 increase is an awful lot but will sting less if you get that markedly better performance

Or even better Fidelity cap at £90pa on exchange traded assets and it's even capped across all accounts with an allocated Wealth relationship manager for those holding over £250k. Mine was really helpful in arranging what needed to be done with their various departments for my pension sharing order for no extra charge (my workplace pension wanted to charge £1k so I didn't share that one).

Cracking deal, £90 a year so that deserved more research. Doesn't look like that's the offer for new customers.  https://www.fidelity.co.uk/services/sipp/#tab-link
*0.35% service fee applies if you have a regular savings plan or have more than £25,000 invested. Otherwise, a £7.50 per month service fee applies. There will also be investment charges set by the companies and funds you’re investing into which sit outside of our service and dealing fees. 0.2% service fee applies to accounts with over £250,000 invested, and applies to the total value of your investments.

Alexland

kempiejon said:

Cracking deal, £90 a year so that deserved more research. Doesn't look like that's the offer for new customers.  https://www.fidelity.co.uk/services/sipp/#tab-link
*0.35% service fee applies if you have a regular savings plan or have more than £25,000 invested. Otherwise, a £7.50 per month service fee applies. There will also be investment charges set by the companies and funds you’re investing into which sit outside of our service and dealing fees. 0.2% service fee applies to accounts with over £250,000 invested, and applies to the total value of your investments.

They could be clearer - the 0.35% (reducing to 0.20% for Wealth customers) is for holding traditional OEIC funds similar to the 0.25% AJ Bell or 0.45% HL. Fidelity capping is £7.50pm / £90 pa for holding exchange traded assets same as the £120 AJ Bell and £200 HL capping.

Fidelity offer most popular shares and ETFs but sadly you cannot directly hold bonds/gilts so I do that in my AJ Bell capped SIPP. So I'm paying SIPP capping twice (or 3 times if you count my capped AJ Bell LISA) but that's OK as I like to spread my money across multiple platforms and it's still only a bit more than HL charge.

kempiejon

Alexland said:
They could be clearer - the 0.35% (reducing to 0.20% for Wealth customers) is for holding traditional OEIC funds similar to the 0.25% AJ Bell or 0.45% HL. Fidelity capping is £7.50pm / £90 pa for holding exchange traded assets same as the £120 AJ Bell and £200 HL capping.

Fidelity offer most popular shares and ETFs but sadly you cannot directly hold bonds/gilts so I do that in my AJ Bell capped SIPP. So I'm paying SIPP capping twice (or 3 times if you count my capped AJ Bell LISA) but that's OK as I like to spread my money across multiple platforms and it's still only a bit more than HL charge.

Thanks for coming back, indeed they could be clearer, if I'm in the market for a new SIPP, I too spread about, they would warrant a further check.

Alexland

kempiejon said:

Thanks for coming back, indeed they could be clearer, if I'm in the market for a new SIPP, I too spread about, they would warrant a further check.

I think the complexity of them explaining their charges is partly due to them charging the £.7.50 anyway on small accounts without a regular investing plan so the cap applies to both some small (as a minimum charge) and some large (as a maximum charge) accounts in different circumstances (no regular plan on small accounts or exchange traded assets on large accounts). Yet for the usually really small Junior accounts they seem happy to run for free.

Zerforax

kempiejon said:

Zerforax said:

Yes paying more for better performance makes sense but I guess we don't know or can't control performance!
I guess the blended charge would move from currently at 0.375% to 0.51%. My combined pension pot is a large amount hence the £400 annual increase by moving all to Pot 2.

If all we can control is charges then as I said moving to an area of higher charges when we know there is no way to predict future performance seems a wonky idea. 0.375% to 0.51% is a big increase, I make that 25% odd extra charges but for what benefit? Paying a higher percentage fee as the pot grows is giving even more to the more expensive provider if you go with pot 2.

I use Hargreaves Lansdowne as one of my SIPP providers and their fees are 0.45% capped at £200 per year, AJ Bell have my ISA but I looked at their SIPP, charges are even better 0.25 capped at £10 per month. So a £400 increase is an awful lot but will sting less if you get that markedly better performance

I agree paying more like-for-like makes no sense but if a fund/provider is able to manage higher growth then paying more in charges would still be worth it? 

Although having looked more into Penfold, it looks like they charge a higher rate than other providers and then basically make it free cost to employers to get business (at the cost of the employee). 

The BlackRock fund charge is only 0.17% so the rest is just Penfold overcharging for nothing.