SIPP IFA management fees

2

Comments

  • Alexland
    Alexland Posts: 9,653 Forumite
    First Anniversary Photogenic Name Dropper First Post
    kidmugsy wrote: »
    I'd rather pay messrs Vanguard a tenth of that.

    You could try but they haven't launched their SIPP yet or confirmed that it will be at the same price as the ISA at 0.15%.

    Either way if the OP did go down the SIPP route then they would be better using a few of the fixed price platforms such as Halifax/iWeb, Interactive Investor and/or JavisXO/Gaudi. Even if the money was split across these 3x SIPPs it would work out cheaper than Vanguard's possible 0.15% platform cost.

    Alex.
  • Alibert
    Alibert Posts: 113 Forumite
    85k limit means 12 different platforms are needed for full coverage of a £1m !
  • dunstonh
    dunstonh Posts: 116,301 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Alibert wrote: »
    85k limit means 12 different platforms are needed for full coverage of a £1m !

    in reality, that does not happen though. You would instead use a financially sound platform provider and spread the money over multiple fund houses of equally high standing using mainstream funds without with limited illiquid investments and also accept that the risk of total failure of the fund house is very low and with liquid mainstream assets, losses (in respect of fund house/platform failure) are unlikely.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Alibert
    Alibert Posts: 113 Forumite
    dunstonh wrote: »
    in reality, that does not happen though. You would instead use a financially sound platform provider and spread the money over multiple fund houses of equally high standing using mainstream funds without with limited illiquid investments and also accept that the risk of total failure of the fund house is very low and with liquid mainstream assets, losses (in respect of fund house/platform failure) are unlikely.

    so all in one SIPP platform in fact
  • dunstonh
    dunstonh Posts: 116,301 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Alibert wrote: »
    so all in one SIPP platform in fact

    A good number of platforms/SIPPs are not profitable. Some are priced to buy business in the hope of getting enough assets under management to either become profitable or be bought by another firm.

    SIPP failures have been predicted to increase. Which is in part why SIPP providers are having to improve their solvency levels. If the current case regarding SIPP provider liability goes against SIPP providers, then expect more to fail.

    So, it is about being in the right SIPP.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
    First Anniversary Name Dropper First Post
    If you go with a large reputable and regulated platform and buy large reputable investment funds the chances of fraud or failure are remote. You're far more likely to lose money from paying excessive fees and making bad asset allocation choices, that's where you should be worried. But if you are a worrier by nature you can spread your money around if it helps you to sleep at night.

    I mostly invest with US Vanguard and buy US Vanguard index tracker funds. Vanguard is set up as a mutual company so that the funds own the company and the shareholders own the funds. There are no outside shareholders. I have no problem holding >1$M in a single fund with Vanguard.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • Alexland
    Alexland Posts: 9,653 Forumite
    First Anniversary Photogenic Name Dropper First Post
    dunstonh wrote: »
    in reality, that does not happen though. You would instead use a financially sound platform provider and spread the money over multiple fund houses of equally high standing using mainstream funds without with limited illiquid investments and also accept that the risk of total failure of the fund house is very low and with liquid mainstream assets, losses (in respect of fund house/platform failure) are unlikely.

    I prefer to spread across a few platforms and fund managers. As my investments grew I gravitated towards the more reputable and unconnected ones but I still have a soft spot for an introductory bonus and the novelty of making a small investment with a S&S or P2P new entrant.

    Alex.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
    bostonerimus wrote: »
    If you go with a large reputable and regulated platform and buy large reputable investment funds the chances of fraud or failure are remote.

    Sensible people routinely insure against remote risks. If that means spreading pension money over more than one platform I'd do it like a shot. Alas, our SIPPs are too small to have any need for it.

    Would anyone be prepared to name SIPP platforms that are unusually sound, financially?
    Free the dunston one next time too.
  • tacpot12
    tacpot12 Posts: 7,937 Forumite
    First Anniversary Name Dropper First Post
    While I think that charging management fees as a percentage of the portfolio under management is unfair (because the manager generally won't do any more work for a £1m portfolio than for a £0.5M portfolio), this approach does at least allow holders of smaller portfolios to access discretionary management services at a reasonable cost. If these clients were excluded from the firm, the larger portfolio holders would have to bear all the costs of managing the portfolios, so they do get some benefit from this method of charging.
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • Its_mine
    Its_mine Posts: 2 Newbie
    First Anniversary
    Thanks all for the response.
    IFA has confirmed the breakdown of :-
    IFA fees 0.75 %
    Investment expenses 0.5 %
    Platform fees 0.25 %
    At the moment I wouldn't be comfortable going DIY, but thats not to say in the future that I would gain knowledge and confidence to have a go at DIY Is there any reason to stop me transferring to DIY in the future ?
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.1K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.6K Spending & Discounts
  • 235.2K Work, Benefits & Business
  • 607.8K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards