Managed/Model Portfolio ISA/Pensions?

Aminatidi

Looking at SIPP providers and I notice several platforms (II, Vanguard) offer a regular SIPP and a "managed" SIPP.

The composition of the managed SIPP looks very similar to their "off the shelf" fund ranges so I'm not entirely sure how the "managed" option is really that different to just opening a SIPP and buying the "off the shelf" fund.

I know we have a few advisors on here so would anyone have any insight into whether there are pros and cons of this approach or if it's basically a marketing gimmick to give people reassurance through the word "managed"?

Thanks in advance

Albermarle

There is a gap in the market for smaller investors who are inexperienced.

There is very little/no difference in the investments.

The managed fund basically helps very inexperienced investors into a suitable fund, that they would be incapable of choosing themselves, due to lack of knowledge, fear etc.

You are paying for a very basic form of financial advice. I guess if you are younger, they will put you in a higher equity multi asset fund, and if you are older a lower equity one.

dunstonh

Looking at SIPP providers and I notice several platforms (II, Vanguard) offer a regular SIPP and a "managed" SIPP.

In reality, the managed SIPP is not a SIPP. Its a robo option.

I know we have a few advisors on here so would anyone have any insight into whether there are pros and cons of this approach or if it's basically a marketing gimmick to give people reassurance through the word "managed"?

robo options are usually more expensive than multi-asset funds or self select in low cost funds.   Some robos are more expensive than using an IFA.  Robos are great for small values but not once the fund gets larger.

They are effectively matching the portfolio to the risk profile based on a range of questions and that is it.

Aminatidi

Thanks both.  Specifically the II offering is what I'm considering.

Flat account fee plus around 0.18% all-in so very low cost.

Looks very similar to their MyFolio Index range but I assume technically it's made up differently.

https://media-prod.ii.co.uk/s3fs-public/pdfs/managed-portfolio-factsheets.pdf

I totally get they're fixed portfolios in so much as if I pick "balanced" I get the exact same portfolio as someone else who picks "balanced" so I'm not expecting it to be unique or customised to me.

I'm struggling to see a significant downside.

Bostonerimus1

Aminatidi said:

Looking at SIPP providers and I notice several platforms (II, Vanguard) offer a regular SIPP and a "managed" SIPP.

The composition of the managed SIPP looks very similar to their "off the shelf" fund ranges so I'm not entirely sure how the "managed" option is really that different to just opening a SIPP and buying the "off the shelf" fund.

I know we have a few advisors on here so would anyone have any insight into whether there are pros and cons of this approach or if it's basically a marketing gimmick to give people reassurance through the word "managed"?

Thanks in advance

IMO you don't get much more than an initial guiding hand and some psychological benefit. Understanding the basics of SIPPs, funds and asset allocation can be gained in a couple of evenings reading as long as you don't have the pathological fear of basic mathematics that some people do. So I would ask "what's the upside" of a "managed SIPP", nothing IMO and the downside is you are paying for something you can easily DIY. I think people imagine that some financial guru will be buying and selling to maximize their returns, that won't happen and it's probably a good thing because sitting on your hands is often the best strategy once you have a sensible asset allocation.

Aminatidi

Yeah that makes sense.

I've got around £500K self-invested in ISA/GIAs so I wouldn't say I'm considering this from the POV of a "newbie" but II are very low priced for both SIPP and managed SIPP and I actually do quite like the look of the II managed product.

Totally aware that there is not any element of personal advice/management there in so much as it's "for any given risk level that's the portfolio everyone gets".

If it was more expensive I'd be more cautious - but it genuinely looks competitive as hell though at the same time I'm not sure I'm seeing a huge difference between that and just buying a multi-asset fund - except perhaps this might help with stopping the urge to tinker.