DC to drawdown
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Victor_Meldrew
Posts: 208 Forumite
I have a DC (final salary) pension. I have taken IFA advice (which was paid for by company). He advised to transfer out which is what I wanted. I am 55 very soon.
However he has suggested a SIPP with a provider I'm not happy with and he wants 0.65% a year (total of 1.08% charges a year). I want to invest myself as I do not trust IFAs so do not want to follow his suggestions. I will talk to him on Monday again.
Can I just set up a SIPP myself and drawdown using my own strategy thus avoiding his 0.65% charge?
Do I have to get him to sign a financial advice declaration? Will he do it if I don't take his advice on investment?
He has suggested I invest the whole pension in one fund and that will cost me around 2500 a year because of his charge (0.65%)! Not my idea of diversified investment nor does it seem like he's even tried to work for his money.
By the way, I am an experienced investor of 30 years and would like to think I know what I'm doing.
However he has suggested a SIPP with a provider I'm not happy with and he wants 0.65% a year (total of 1.08% charges a year). I want to invest myself as I do not trust IFAs so do not want to follow his suggestions. I will talk to him on Monday again.
Can I just set up a SIPP myself and drawdown using my own strategy thus avoiding his 0.65% charge?
Do I have to get him to sign a financial advice declaration? Will he do it if I don't take his advice on investment?
He has suggested I invest the whole pension in one fund and that will cost me around 2500 a year because of his charge (0.65%)! Not my idea of diversified investment nor does it seem like he's even tried to work for his money.
By the way, I am an experienced investor of 30 years and would like to think I know what I'm doing.
I don't believe it!
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Comments
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Final salary pension is usually another way of saying DB pension, not DC as you say.
You will need the IFA if you have a DB pension with a CETV of more than 30k that you want to transfer. Otherwise you certainly don’t need an IFA to manage your money.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
Sorry DB pension is correct.
CETV is well over 30k
He has agreed it is best if I transfer but do I have to go with his investment advice?I don't believe it!0 -
Do I have to get him to sign a financial advice declaration?Will he do it if I don't take his advice on investment?
Possibly not. He may withdraw his offer of advice as DIY investing carries a higher liability risk to the adviser. It can largely depend on your investing history and experience and what assets you intend to use.He has suggested I invest the whole pension in one fund and that will cost me around 2500 a year because of his charge (0.65%)! Not my idea of diversified investment nor does it seem like he's even tried to work for his money.
How do you know that the one fund is not diversified? A low cost multi-asset fund could be diversified fine.By the way, I am an experienced investor of 30 years and would like to think I know what I'm doing.0 -
Would it be possible to go with who he says just to get the transfer done and then move to a SIPP of your choosing?Money SPENDING Expert0
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Will he do it if I don't take his advice on investment?
From other threads it seems this is a grey area and usually it is best to clarify this before even starting the whole process.
However I would say if the IFA is being awkward then I would threaten to report them to your company who has actually paid for their services.0 -
yes
How do you know that the one fund is not diversified? A low cost multi-asset fund could be diversified fine.
You may say that but I would have concerns immediately if you think its not possible for a single fund to be diversified.
Because the fund he has chosen is HSBC global strategy balanced portfolio. I have looked at the asset class breakdown and the holdings.
Over 70% is invested in HSBC funds. That is not diversified enough - there are better funds and I would not want to keep all my eggs in HSBC's basket.I don't believe it!0 -
Victor_Meldrew wrote: »Because the fund he has chosen is HSBC global strategy balanced portfolio. I have looked at the asset class breakdown and the holdings.
Over 70% is invested in HSBC funds. That is not diversified enough - there are better funds and I would not want to keep all my eggs in HSBC's basket.
You can be asset diversified in a single multi-asset fund that contains funds from a single company and don't need to worry about owning funds from just HSBC, Blackrock or Vanguard for example. I have large amounts in just Vanguard funds as it keeps my fees low and I'm happy with my asset diversification and the safety of my money.
Your comment that "there are better funds" gives me pause. On what basis are those funds better? and what do you need from your fund? How much risk and return are baked into your retirement plan? The HSBC balance might be the perfect match, but we don't have enough information to evaluate that.
Your IFA's recommendation is refreshingly simple, but it undercuts the value of any fees they might charge as it doesn't require much of any management. But sometimes paying for a steady hand is worth it.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
Victor_Meldrew wrote: »Because the fund he has chosen is HSBC global strategy balanced portfolio. I have looked at the asset class breakdown and the holdings.
Over 70% is invested in HSBC funds. That is not diversified enough - there are better funds and I would not want to keep all my eggs in HSBC's basket.
As “global” funds go I’d have thought that one looks pretty reasonable. Easy to leave to run with little tinkering.
With your 30 years of investment knowledge, where would you rather put the money?Plan for tomorrow, enjoy today!0 -
Victor_Meldrew wrote: »Because the fund he has chosen is HSBC global strategy balanced portfolio. I have looked at the asset class breakdown and the holdings.
Over 70% is invested in HSBC funds. That is not diversified enough - there are better funds and I would not want to keep all my eggs in HSBC's basket.
HSBC GS balanced is a cracking fund. Well diversified. It is actually an unfettered fund of funds but has a high quantity of HSBC trackers at the moment as HSBC trackers are some of the best going at the moment.
The diversification is fine. For anyone under £100k, this is a perfect fund.0 -
Based on the OPs post's I would worry about their perceived knowledge and skills in investing.Personal Responsibility - Sad but True
Sometimes.... I am like a dog with a bone0
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