Releasing funds from a pension

EdInvestor

dunstonh wrote: »

Their typical target market is the DIY investor.

That's right, like most of the people who arrive here looking for pointers on ways of saving money.

It doesnt matter what the person on the thread asks for you give HL as the answer

That's because it's the cheapest.

averageguy11

Totally agree Ed

jem16

EdInvestor wrote: »

That's right, like most of the people who arrive here looking for pointers on ways of saving money.

Then there is the rest who arrive here because they are looking for help with their pension/investment as they don't have a clue in the first place. Saving a bit of money on the initial charges and annual fee won't be a lot of good if the investment is bad because of inexperience.

dunstonh wrote:

It doesnt matter what the person on the thread asks for you give HL as the answer

EdInvestor wrote:

That's because it's the cheapest.

In an investment best is far more improtant than cheapest.

dunstonh

That's right, like most of the people who arrive here looking for pointers on ways of saving money.

Most of whom havent a clue about investing, pensions, ISAs or whatever. Yet you push them to an execution only service which sells an experienced investor product (SIPP) designed for those that know what they want. HL is great for the person that knows what they are doing. Its not the cheapest but what it offers is very good. However, for the inexperienced investor who doenst know what they want and what is best for them an option like HL's SIPP is quite dangerous. New investors of limited knowledge tend to go to the performance tables and pick the best performers. Usually looking at cumulative performance and not discrete and typically picking funds above their risk profile. A recipe for losing money and what is worse is that a good number of these will pull out when the markets are bad and make a loss (so much for it being cheaper) and then swear never to invest in the stockmarket again as they lost money. When in reality it wasnt the stockmarket that lost them money but their investing in high risk areas and lack of diversification.

I dont know why HL lost money under management last quarter when others didnt but perhaps it is because many of the inexperienced investors they have gained over the years pulled out in panic. Whilst the exprienced investors will just see it through to the other side or will even increase the investments.

EdInvestor wrote: »

That's because it's the cheapest.

HL is not the cheapest. You keep saying it but it is not the case.

jamesd

Hargreaves Lansdown is readily available with clear pricing that can easily be checked by someone looking. That's not an insignificant advantage compared to say products that sell only via IFAs and don't put much useful information about their product online.

When disagreeing with EdInvestor, one problem is not providing an example that can be pointed to to illustrate the point that HL is not cheapest. No example and EdInvestor is unlikely to believe it or change behavior.

dunstonh

We have given examples many times before but Ed just ignores them.

Selestia for one with the ability to rebate some of the fund based trail. Transact and Scottish Widows with larger portfolios where the discounts make it cheaper than HL.

If you dont want a massive range of funds or external investments then you have personal pensions with say 100-300 funds where the reduction in yield due to charges can be 0.7%p.a. with full commission and as low as 0.3% on no commission. HL would be closer to 1.6% reduction due to charges.

And dont rule out the humble stakeholder. Better for those that are closer to retirement and dont intend to use the range of external investments.

I am not knocking HL's product as it is very good. However, it is not the 100% solution for everyone. The SIPP is an experienced investor product and it has higher charges than all stakeholder pensions and many personal pensions. Experienced investors will accept the higher charges for the range of invesmtent options available. Sending people that dont know what they want investment wise into a more complicated product with expensive investment options is wrong. The potential for making mistakes far exceeds the costs of getting advice.

I recently posted an example where even if an IFA takes full commission on a personal pensions they can almost match the pensions done on nil commission execution only basis through the execution only brokers. On 75% commission it would have matched the nil commission option.

Over the years, I have come across so many people who have gone DIY investing with limited knowledge who invested on the basis of past performance and have lost money because they didnt understand risk vs reward. The cost of a decent IFA over 30 years of investing may only account for 0.1-0.3% p.a. Yet get the investments wrong and you can be looking at many percentage points.

There are more people that need hand holding with investing than those that do not yet Ed tells everyone to go to HL. The knowledge, experience and willingness to learn and keep under review needs to be considered before sending someone down that route. And saying HL is the cheapest is just an outright lie.

EdInvestor

jamesd wrote: »

Hargreaves Lansdown is readily available with clear pricing that can easily be checked by someone looking. That's not an insignificant advantage compared to say products that sell only via IFAs and don't put much useful information about their product online.

When disagreeing with EdInvestor, one problem is not providing an example that can be pointed to to illustrate the point that HL is not cheapest.

Exactly so.DH's examples all require not only thst you use an IFA, but that you find one who is competitively priced whoi will do you a cheap deal.Most will not.

Meanwhile depending on what you want to invest your money in, there are other cheap providers in the SIPP field such as

https://www.sippdeal.co.uk
https://www.alliancetrust.co.uk

For shares, and certain types of funds, and cash, these may be cheaper than HL.They also have clear info, application forms etc on their websites, so you can proceed without fuss. HL has the best info on the site about investment.

There is absolutely no guarantee whatsoever that investment advice from an IFA is going to be any better that what you decide on yourself , particularly if you put a bit of effort in learning a few basic concepts.

purch

HL's SIPP is quite dangerous

That is likely to be something we will be hearing more and more in the coming years, when inexperienced and vulnerable Pension savers find that their hastily put together, poorly researched and most likely not reviewed often enough once the initial 'buzz' of investing has worn off, DIY investment has performed much worse than they hoped or expected.

EdInvestor

purch wrote: »

.... hastily put together, poorly researched and most likely not reviewed often enough....

And how is this different from the historical experience of anyone using an average advisor and a bog standard lifeco product?

jem16

EdInvestor wrote: »

There is absolutely no guarantee whatsoever that investment advice from an IFA is going to be any better that what you decide on yourself , particularly if you put a bit of effort in learning a few basic concepts.

There are no guarantees for anything.

However I think if you see a proper investment IFA and not a tied FA there is a very good chance that it will be a lot better than anything an inexperienced investor could do for him/her self. A few basic concepts aren't going to get you very far.

Like anything else if you have the time, the effort and the inclination you could probably manage most things. Meanwhile whilst you learn you can make an awful mess of things.