SIPP question

[SueEllen]

For what it's worth I wouldn't bother with a SIPP. Normal pension, in managed funds with the lowest possible management cost and no trail commission.
Unless you are going to buy a house (or other business) with it a SIPP doesn't make that much sense IMO. Better off concentrating on maximising your revenue doing what you know and leave financials to someone who knows that.

No everyone is lucky enough to be able to find or actually have one of those their company can contribute to. If you can't you may as well open a SIPP.

[Fred Bloggs]

Curious. My IFA suggested that he couldn't match or beat the charges on offer, and a different IFA told a friend of mine a similar line. Care to share some detail on why it's a very poor option compared with others out there?

Focussing on costs alone I think the annual fee is around 0.45% of SIPP assets. For an insurance company it's probably reasonable. If you look at SIPP platforms though, that is very expensive. There is an article in the Telegraph that lists all the popular platforms and their charges. Take a look.

[Fred Bloggs]

For what it's worth I wouldn't bother with a SIPP. Normal pension, in managed funds with the lowest possible management cost and no trail commission.
Unless you are going to buy a house (or other business) with it a SIPP doesn't make that much sense IMO. Better off concentrating on maximising your revenue doing what you know and leave financials to someone who knows that.

You can't buy residential property in a SIPP. The rest of the post is complete nonsense too.

[Lance]

You can't buy residential property in a SIPP. The rest of the post is complete nonsense too.

maybe I need to read up as I was told this by an 'expert' whom I now doubt.

Where's that idiot's guide ?

[northernladuk]

You can't buy residential property in a SIPP. The rest of the post is complete nonsense too.

I thought you could but there are a lot of rules and it's not really viable?

http://www.ftadviser.com/2015/01/08/...O/article.html

Have the rules changed?

[lukemg]

First - Ask the IFA where their money is invested and details of last 5 years returns against world index.
Second - Ditch the IFA they are adding nothing and taking a cut, 0.45 doesn't sound much ? it does if your return is 5%.
Third - Avoid managed funds regardless of the published cost, they have back costs that aren't in the published rate that could easily be taking half your return, plus longterm they dont beat indexes/survivorship/bell curve etc etc.
Fourth - Use discount broker (HL, Interactive Investor)
Fifth - Vanguard Lifestrategy fund 80% shares, global low-cost, diversified, zero maintenance.
Sixth - Invest direct from Company up to 40k, use PCA or value cost averging to spread payments through year.
Seventh - NEVER SELL even if the sky looks like its falling in, if anything buy more
Eighth - thank me in 15 years.

[Hobosapien]

First - Ask the IFA where their money is invested and details of last 5 years returns against world index.
Second - Ditch the IFA they are adding nothing and taking a cut, 0.45 doesn't sound much ? it does if your return is 5%.
Third - Avoid managed funds regardless of the published cost, they have back costs that aren't in the published rate that could easily be taking half your return, plus longterm they dont beat indexes/survivorship/bell curve etc etc.
Fourth - Use discount broker (HL, Interactive Investor)
Fifth - Vanguard Lifestrategy fund 80% shares, global low-cost, diversified, zero maintenance.
Sixth - Invest direct from Company up to 40k, use PCA or value cost averging to spread payments through year.
Seventh - NEVER SELL even if the sky looks like its falling in, if anything buy more
Eighth - thank me in 15 years.

So for number 7 that is buy more in VLS in number 5 rather than attempt to self diversify when VLS is doing that already?

How often does VLS rebalance to take into account current/future trends, if such a thing matters for it to perform optimally over the long term?

Placeholder for year 2031: Thanks!

[mudskipper]

As always, don't take advice from random strangers on the internet - speak to a financial adviser who will understand the figures presented.

[Hobosapien]

Sounds like a good idea. Already got other questions popping into my head such as if dividends are automatically re-invested do we get notified of the dividend amount for any divi tax calculations, and is a SIPP going to be more efficient than say a S&S ISA, depending on current tax situation.

I imagine there's lots of other stuff to tick off before deciding on best way forward based on own circumstances.

[lukemg]

So for number 7 that is buy more in VLS in number 5 rather than attempt to self diversify when VLS is doing that already?

How often does VLS rebalance to take into account current/future trends, if such a thing matters for it to perform optimally over the long term?

Placeholder for year 2031: Thanks!

Yes, buy more VLS- so I use Value cost averaging to dictate monthly investment.
it sets a target amount for each month - 1st month 4000in ,2nd month - make it up to 8000, 3rd month make it up to 12000 etc. So when you check the first months investment, it may have gone up to 5000, you only add 3000 to make it up to 8000 or if its gone down to 3000, you add 5000.
This automatically means you buy more at lower prices and less at higher ones.
VLS is spread across thousands of shares, it is all the diversification needed, plus the 20% in fixed interest/bonds means they are rebalancing constantly so you don't even need to do that.
You can choose to re-invest divis or not, its a SIPP so no further tax implications.