DIY Pensions for a Limited Company?

[Fred Bloggs]

Well, SJP offer a highish total fee and the price to be paid for that is that you are crippled for choice of funds. You make the decision that is right for you.

I've spoken to three different IFAs who said that they couldn't come close to the IPSE offering. Clearly, you think differently, which is why it's important for everyone to look at their individual circumstances and work out what is best for them, rather than blindly taking advice from anonymous users on an internet forum

Correct, on all counts. That's why I often say DYOR. FWIW, I pay GBP 20 per quarter for my SIPP/ISA portfolio and for that I get two trades per quarter that are nominally GBP 10 per trade. The GBP 20 per quarter applies whether you hold GBP 1,000 or GBP 1,000,000 in the portfolio. It's a flat rate deal. And the choice of funds is whole of market.

Indeed, DYOR. No IFA will ever offer you the deal I have whether they can beat IPSE or not. They simply wouldn't make enough out of it. My account is with II.

[Fandango]

With regards to the suggestion moving from HL to iii when you have > £40k I started making SIPP contributions 2 years . I bunged £20k in each year so have contributed £40k, I spread it across various funds, a couple were HL ones and my pot is now sat at £50k which isn't too bad I don't think?? However I noticed I'm paying HL ~£18/month in Fees. which is high compared with the figures quoted for iii,

I stumbled across this thread just now so will admit I've not read any of my HL literature yet but could anyone who's done it advise what the likely costs/penalties if any are to move across to iii would be?

The first year I bunged the £20k into HL managed funds so I'm presuming they are unlikely to be available on iii, and in that sort of scenario is it best to leave that £20k where it is and just continue with iii? I plan to chuck another £30k in this week as year end is up at the end of the month

TIA

[Fred Bloggs]

With regards to the suggestion moving from HL to iii when you have > £40k I started making SIPP contributions 2 years . I bunged £20k in each year so have contributed £40k, I spread it across various funds, a couple were HL ones and my pot is now sat at £50k which isn't too bad I don't think?? However I noticed I'm paying HL ~£18/month in Fees. which is high compared with the figures quoted for iii,

I stumbled across this thread just now so will admit I've not read any of my HL literature yet but could anyone who's done it advise what the likely costs/penalties if any are to move across to iii would be?

The first year I bunged the £20k into HL managed funds so I'm presuming they are unlikely to be available on iii, and in that sort of scenario is it best to leave that £20k where it is and just continue with iii? I plan to chuck another £30k in this week as year end is up at the end of the month

TIA

In your case, I'd guess it is pretty marginal whether to change from HL to II or not. It also depends on how many funds you hold and whether you do an in specie transfer or whether you liquidate to cash and then do a cash transfer. IIRC HL charge an exit fee of GBP 50 per fund for in specie transfers plus a GBP 50 exit fee. You need to check this out though, it is a year since I transferred and save myself about GBP 120 every month.

[lukemg]

Agree with most of the posts:
- HL Do have bigger charges as a platform fee BUT I still recommend them for starters as they make it easy(I also have bulk of mine in ETF's, they are treated as shares)
- III do seem to be a good option when you have a 40k or so, it costs more to transfer if you have multiple funds but can always sell down before transfer ? Some companies give you a contribution to costs if you move a bigger chunk too.

Active funds ? PLEASE make sure you know why you are investing in these. Warren Buffet has stated virtually all investors should buy the index and get on with something else... He also has a $1m bet going with some hedge funds that they can't beat the index for returns after COSTS over 10 years, 8 years in it's game over, the index has earned 3x as much.
The costs matter probably more than anything else. It isn't just the standing charge, there are transaction and admin costs that are buried in the fund that you are paying AS WELL.
Over 10 years 80-90% of funds do worse than the index after costs and there is NO way to know which 10% will exceed, it just isn't worth it.
They are a triumph of marketing but a terrible idea for small investors.
Same goes for any IFA's taking a piece out, SJP etc. I presume you feel special paying these people (people like PT's too for the same reason), long term you are being mugged for thousands and thanking them for doing it !

[FarmerPalmer]

Active funds ? PLEASE make sure you know why you are investing in these. Warren Buffet has stated virtually all investors should buy the index and get on with something else... He also has a $1m bet going with some hedge funds that they can't beat the index for returns after COSTS over 10 years, 8 years in it's game over, the index has earned 3x as much.
The costs matter probably more than anything else. It isn't just the standing charge, there are transaction and admin costs that are buried in the fund that you are paying AS WELL.
Over 10 years 80-90% of funds do worse than the index after costs and there is NO way to know which 10% will exceed, it just isn't worth it.
They are a triumph of marketing but a terrible idea for small investors.
Same goes for any IFA's taking a piece out, SJP etc. I presume you feel special paying these people (people like PT's too for the same reason), long term you are being mugged for thousands and thanking them for doing it !

Absolutely, you need to pick the 10% that do outperform (TrustNet 5 Crown is a good start), and keep an eye on them in case the manager changes, or the fund changes tact.

You need to look at funds like Fundsmiths Equity, Old Mutual Global Equity, CFP SDL Buffettology, MFM Slater Growth, Schroder US Mid Cap, Man GLG Continental European Growth, Baillie Gifford Shin Nippon, Blackrock Frontiers.

You also need to understand the risks of different types of investment vehicles.

You need to look at consistency, over years, up to 10 years see how they performed in the 2008 crash. Halifax research site gives 10 year figures or graphs, Trustnet only goes to 5 years. And understand that management may change in those 10 years.

Also what I have found is that it is much harder to find a fund that outperforms the US market, I guess because there are so many trackers funds investing there that it changes the dynamic.

You have to want to do it, or just invest in trackers, it is much easier

[lukemg]

I used to do this, go through the recommended funds etc. There is a reason why they say past performance is no indicator of the future returns.
Some funds do stick out of the pack but by the time they do, it is too late to get on them for a few reasons:
- You can't predict the winners from those that won the last race,
- Size : As the funds are successful, an avalanche of 'previous history' chasers money piles in, the fund has to allocate all this new money and keep up performance, this is a problem. ALSO, as the fund turns into billions, it is really hard to move the performance needle from each investment.
- Survivorship bias : Fund companies open up multiple new funds in every area they can see some interest from investors. They then quietly close or merge any that aren't shooting the lights out, making the survivors performance look better.

In addition, OP is a newbie so would defo not advise previous performance chasing.

[IR35 Avoider]

Absolutely, you need to pick the 10% that do outperform

In case any newbies are reading the thread, I'll just clarify that you meant you need to pick the 10% that will outperform in future, not that have outpeformed in the past. Which, long story short, is impossible.

Telling people to pick the 10% that will outperform is about as useful as this advice, attributed to Will Rogers, whoever he is/was.


Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it.

[blackeye]

There should be a sticky post for this to make it super easy for newbies.

1. Open SIPP with a fund supermarket
3. Decide on your bond:equity risk appetite
2. Invest in a global tracker such as vanguard lifestrategy

Skip the redundant retail IFAs. They are only worth your time and money if you are a high net wealth customer and literally have millions to preserve.
Skip any managed funds because over the long term (i.e. a pension) they do worse than passive / tracker funds.

[northernladuk]

There should be a sticky post for this to make it super easy for newbies.

1. Open SIPP with a fund supermarket
3. Decide on your bond:equity risk appetite
2. Invest in a global tracker such as vanguard lifestrategy

Skip the redundant retail IFAs. They are only worth your time and money if you are a high net wealth customer and literally have millions to preserve.
Skip any managed funds because over the long term (i.e. a pension) they do worse than passive / tracker funds.

Thats sounds like poor advice from someone that knows and is thinking they are helping newbies to me.

[blackeye]

Thats sounds like poor advice from someone that knows and is thinking they are helping newbies to me.

Care to explain? It's the 101 in my opinion.