SIPP management ongoing - where to even start?
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Lisyloo what is the fee you pay based off? The return they make for you or the total value of the portfolio?
It’s 0.5% of the portfolio they manage.
So for a £150k portfolio that’s £750 annually (that doesn’t buy much IFA time as their fees have to reflect their liabilities). That comes directly from my SIPP so I don’t see it, only in a slightly lower return.
One way to looks at it is that they only have to do 0.5% better than me to justify their fee and they could avoid large losses.
I use them for general Financial advice (I also have stocks and shares ISA with them) and they have helped transfer employer pensions for me (or advise against it).
Recently I obtained an extra £474 from Hargreaves lansdown for
losses on a SIPP transfer that I might not have obtained without their technical help proving the loss.
There is indeed the alternative of keeping it in a lazy fund. I have one of those with my current employer.0 -
I don’t think an IFA is appropriate if all you want to do is understand and select funds for a workplace pension. The management fees that people are referring to are for managing investments under the control of an IFA. Your workplace pension will not be under an IFA’s control. My suggestion would be that you read your scheme’s literature, understand what fund choices you have and make a selection based on your circumstances and goals. You are in the same position as most people with a DC pension and already understand more than most because you are researching the fund that you are invested in, many people don’t get that far. IFA’s do not typically take on the management of workplace pensions.0
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Hi all
I have a SIPP with Legal & General, which is my workplace pension. I pay ..annually about £18k of contributions.
From my last statement it looks like the value grew by £8k over the course of 12 months.
Curious as to how others manage their pensions ongoing.
Mine is invested in a Lifestyle Fund with L&G, it’s called Gbl Eq FW 50:50/PreRet 5yr LS. !
What date is on your statement?
I trust the fund grew your investment by £8k over and above £18k contributions.0 -
ZingPowZing wrote: »What date is on your statement?
I trust the fund grew your investment by £8k over and above £18k contributions.
Looking back at the last two years statements:
- April 2017: pot £65k. Paid in £14k (includes any tax relief). April 2018: pot £82k. Statement says investment gain of £2.4k (I’ve rounded the numbers slightly for ease)
- April 2018: pot £82k. Paid in £39k (includes any tax relief). April 2019: pot £130k. Statement says investment gain of £8k (again rounded)
In that year I made a one-off payment outside of my monthly contributions in order to regain some of my personal allowance.
The pot now stands at £149k, with 9 payments made of £1.45k each this suggests that there has been a gain of £5-£6k since April 19.0 -
I don’t think an IFA is appropriate if all you want to do is understand and select funds for a workplace pension. The management fees that people are referring to are for managing investments under the control of an IFA. Your workplace pension will not be under an IFA’s control. My suggestion would be that you read your scheme’s literature, understand what fund choices you have and make a selection based on your circumstances and goals. You are in the same position as most people with a DC pension and already understand more than most because you are researching the fund that you are invested in, many people don’t get that far. IFA’s do not typically take on the management of workplace pensions.
Thank you this is a very pragmatic response. In the first instance I’m going to understand the lifestyle funds in more detail as I’m not in a huge rush to change things, just want to make sure I’m not being really foolish.0 -
To those surprised it’s a SIPP. I’m not sure I can do much to help there only to re-state definitively that it’s called a SIPP on both my statements and when I log in to the website.
Maybe it’s different to a regular SIPP I don’t know how to find that out though.0 -
5) if you are ill or on holiday when there’s a major event e.g. 9/11 then you won’t be able to react DiY. Actually my arrangement needs me to react but only to send an email saying yes. There are (more expensive) services where they can act independently of you. But bear in mind that DiY is dependent on you not neglecting the portfolio when anything happens in your life (like moving house or dealing with a close family funeral or elderly care).
When a major event happens the right thing to do is nothing. Best returns are achieved by people who invest in a diversified portfolio and forget about it for a few decades.0 -
50:50 means that one of the fixed %s is the 50% allocated to UK companies with 50% allocated elsewhere. This was common say 20 years ago but now many investors would consider this is too much UK. The problem is that there are very few large UK companies in the major growth technology sectors. So the UK has generally underperformed the rest of the world over the past 10 years.
If you can acquire the knowledge and understanding to go through the steps from (1) to (4) yourself then you may not need an IFA. You will learn a lot in the process. If you use an IFA you will go through the process quicker, be less likely to make mistakes, but incur fees and perhaps learn less.
Thank you very much, your four point plan is very helpful, as is your explanation of the fund. Your point above on UK % is interesting as I have options to change that weighting (example you 70/30) and will consider this when I review the other fund options.
I’m not adverse to using an IFA but I’d also like to understand this better myself so that’s going to be my starting point anyway.0 -
Agree that 50% UK is too much. Some home bias is helpful but not to this degree. https://personal.vanguard.com/pdf/icrrhb.pdf
Is this a tracker fund? Do you know what the charges are? What does “5yr LS” stand for? Do you hold any bonds at all between your two pension pots?
If you want to find out how well your portfolio is performing, you should find a benchmark and compare against that over a similar period. 1 year is too short; 10 years would provide a better time span. For a 50% UK and 50% rest of the world fund, you can compare against 50% FTSE All-Share Index and 50% FTSE All World Ex UK index. When comparing, make sure you are using time-weighted return of your portfolio.0 -
Deleted_User wrote: »When a major event happens the right thing to do is nothing. Best returns are achieved by people who invest in a diversified portfolio and forget about it for a few decades.
I agree to no knee jerk reactions, but are you saying those invested in property funds or with Neil Woodford should have done nothing?
Quite often actually when something happens my IFAs report that the portfolios are sufficiently well diversified to handle the risk and don’t need change, however there are times when it’s been worth pulling out of poorly performing funds and not staying in them for decades.
For example we’ve pulled out of property funds which were closed for a while (at the appropriate time).
Do you have evidence that doing nothing is best over the long term?
(Serious question I’ve seen comparisons of active vs trackers In the past).0
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