SIPP/Financial Advisor

dunstonh

I have seen lots of experts "views" that we should stick with Personal Pensions because their charges are lower... but very little actual comparisons and examples to illustrate and prove the point.

So you mean you have ignored all those posts that have given examples. i.e. stakeholder (no initial charges and 1% typical maximum on full commission but 0.5-0.6% on execution only). Personal pensions with reduction in yields as low as 0.3% p.a. Comparing to HLs SIPP using funds where the typical reduction in yield is 1.7%

How about picking unit trusts and looking at a fund supermarket pension on execution only basis:

Aegon High yield bond - HL SIPP: 1.0% amc - fund supermarket 0.45%
Allianz RCM BRIC - HL SIPP 1.75% - fund supermarket 1.20%
Inv Perp income - HL SIPP 1.50% - fund supermarket 0.95%

More or less 0.55% p.a. cheaper across the board on the unit trusts

BTW: I see someone has recommended the SKANDIA LIFE PP, so perhaps I should start by comparing this with HL / SIPPDEAL ?

I saw that post and they mean the Skandia Selestia collective retirement account and yes you should compare it. Whilst it does have an initial charge of around 0.7%, it can have fund based trail rebated depending on where you buy it (making the annual management charges upto 0.5% p.a. cheaper than HL). Plus being a personal pension it can do protected rights and ordinary rights now.

whiteflag_3

Gatser wrote: »

:T Well said!
I have seen lots of experts "views" that we should stick with Personal Pensions because their charges are lower... but very little actual comparisons and examples to illustrate and prove the point.
This is something I am intending to look at through my WHICH IS THE BEST SIPP thread.

OK Gatser just run a projection using my pensions profiler

male age 51 next birthday , NRD 65 Single transfer £101K 7% growth

Full commission

Best PP - £243,095
Standard Life SIPP £235,096
Worst SIPP £158,485

Nil Commission

Best PP £257,695
Standard Life SIPP £244,625
Worst SIPP £165,940

Hope this helps!

EdInvestor

whiteflag wrote: »

Best PP - £243,095
Standard Life SIPP £235,096
Worst SIPP £158,485

Any figures for the best SIPP?[And which one would you think that was?]

whiteflag_3

EdInvestor wrote: »

Any figures for the best SIPP?[And which one would you think that was?]

£239,709

Nil comm

£249,907

EdInvestor

I rest my case. :rolleyes:

whiteflag_3

EdInvestor wrote: »

I rest my case. :rolleyes:

Your case being?


Instead of rolling your eyes, it may be better you opened them wider and then you might see the PP beats the "best" SIPP, Standard Life SIPP and the "worst" SIPP on both a full commission and nil commission basis?

ps Ed

I think you thanked me recently for pointing out that they (IFAs) may not be doing an awful lot for the extra 0.5% they are taking to administer SIPPs.

This wasn't true then?

Gatser

Questions:
a) Where do these "profiler" results come from?
I am always sceptical about results like this without seeing the actual calculation basis

b) If the difference between Best SIPP & Best PP is £250k vs £258k, I am not going to lose sleep over a 3% difference that is based upon unknown variables.

whiteflag_3

Gatser wrote: »

Questions:
a) Where do these "profiler" results come from?
I am always sceptical about results like this without seeing the actual calculation basis

b) If the difference between Best SIPP & Best PP is £250k vs £258k, I am not going to lose sleep over a 3% difference that is based upon unknown variables.

LOL -So now I posted the info you requested, you now want to know where its come from! They come from a system that IFAs have to pay a licence for and is updated monthly using info supplied by each pension provider.

What are the unknown variables in these projections ?- the only thing they show for certain is the effect of the charges.

The unknown part is the part you want to take control of . If you think you can make up the £8K difference using your investment skill then go ahead with the SIPP.

btw the SIPP projection wont include any additional fund costs whereas the PP includes fund management ( for your info the amc is 0.75% per annum on the full commission version with no inital charges or exit fees)

dunstonh

b) If the difference between Best SIPP & Best PP is £250k vs £258k, I am not going to lose sleep over a 3% difference that is based upon unknown variables.

The 3% difference is a known "variable". Its the difference in charges (and impact of charges) assuming the same values invested and the same growth rate projections. Its the one thing that is set and known.

a) Where do these "profiler" results come from?
I am always sceptical about results like this without seeing the actual calculation basis

You seem to be happy accepting Eds misplaced views without seeing a single illustration, comparison or research. Unlike Ed, we are professionally liable for the advice we give. We do research and keep it documented and provide it to support the recommendations. We have access to the facts and figures of all the schemes. Where is Eds research and evidence?

This is not a place to take an anti IFA or pro IFA stance. There are people reading these posts without commenting who may make decisions based on their content. We have seen evidence on these forums before when people have invested in SIPPs and ended up in more expensive funds with worse past performance than what they had on their stakeholder or personal pension.

Some may like a bit of IFA bashing but it doesnt help those that are the silent readers. I'm a mostly hybrid fee based adviser and I understand that whiteflag is a pure fee based adviser. We earn the same amount whether we do stakeholder, personal pension or SIPP. Commission advisers can typically earn more on a SIPP than a personal pension or stakeholder. HL certainly earn more on it. You dont think that their £9 billion at 0.5% per annum is a good reason why they retail a SIPP and not an execution only stakeholder or personal pension where they wouldnt get that.

SIPPs are a great product. However, they are not low cost for funds and they are not the 100% best option for everyone. They are fashionable at the moment. In the same way tech funds and endowments once were.

Everyone reading has a choice. Follow the fashion blindly or understand the options and make an informed choice. It doesnt matter if you get advice or do it yourself. Just open your eyes.

jem16

EdInvestor wrote: »

I rest my case. :rolleyes:

That will be the case that says; "I'm beaten and I know it but don't want anyone else to know it so I'll roll my eyes and hope to get away with it"

Gatser wrote: »

b) If the difference between Best SIPP & Best PP is £250k vs £258k, I am not going to lose sleep over a 3% difference that is based upon unknown variables.

Make sure you get Ed's contact details - you may need them in 20 years when SIPPS go the same way as endowments and you're looking to put in a complaint.