Cavendish Online for Pensions?

**pmeswani** · 31 July 2009, 19:34

Originally posted by Colourful Contractor View Post

I am looking to set up a pension scheme through my ltd co, initially putting in a lump sum of c£15k and then £1k pm as employer contributions. Most stakeholder schemes seem to offer fairly standard charge of annual mgt fee upto 1% with a reasonable number of funds to choose between. I think this is better suited to my time and knowledge than a SIPP that requires more active management.

Has anyone here used Cavendish Online for setting up a pension (or any other discount broker)? They refund the annual commission that would be paid to an IFA (c 0.5% on an Aviva stakeholder pension) for a one-off fee of £35. Is this one of those ‘too good to be true’ scenarios? Going direct to the provider of a stakeholder pension doesn’t seem to offer any discount on going through an IFA.

I have consulted an IFA but feel that the commission they charge is not really worth it, I would be happy to select a broad spread of funds myself and not incur 3.5% charge that I have been quoted.

Apologies if this has been asked before, I have searched on here already and couldn’t find anything specifically on Cavendish Online. I have been perusing these boards for a year now and found some really helpful advice but also know people get shot down in flames for asking the obvious….

I haven't heard of them myself. However, you would be better off with a SIPP. Here's my reasons why:

1. You are in control of your contributions and choice of investments.
2. The management fees could be a lot less.
3. You don't have to chop and change your investment choices (misconception).
4. You probably get a better discount option with a SIPP as opposed to a traditional pension scheme.
5. You don't have to be an expert to make the right choices in your SIPP. If you don't read into the companies you are investing in your pension, you probably worth not having a pension scheme anyway.

Here's my advice on which SIPP provider you should go for (and guess what it's free!). Go for Hargreaves Lansdown. (www.h-l.co.uk). You may have access to more funds than some providers, and you will get a lot of investment ideas.

At the end of the day, you have to make your own decisions, we can't make it for you. If you want to invest in Cavendish... go for it. Just prey and hope you won't regret it.

**pzz76077** · 31 July 2009, 19:37

You are plugging for business right??
Why dont you just come out and say it??

PZZ

**moorfield** · 31 July 2009, 19:49

Avoid Cavendish and do it yourself - use either Hargreaves Lansdown or Sippdeal.

No need to waste either your time or money on IFAs in this age of t'internet.

Edit:
PS. Sippdeal site is down this weekend for a system upgrade.

- but so far I can't fault them.

**pzz76077** · 31 July 2009, 19:52

Cavindish = avoid.

PZZ

**DaveB** · 31 July 2009, 21:29

I used them for setting up some life assurance.

Exactly what they say on the tin. £35 quid flat fee and a damn sight cheaper than any other I've found.

Came in over £100 a month cheaper than any other quote I had for equivalent or better cover.

**Colourful Contractor** · 31 July 2009, 21:50

Had a look at the Hargreaves Lansdown website and it provides an impressive amt of information to help with investment decisions. I'm just not sure that I want to take such an active role in managing my pension, but I appreciate pmeswani's point that you don't necessarily have to be switching anymore than you would with a stakeholder pension and that with both you need to have an awareness of the market.

The charging structure for SIPPS looks more complicated though, I like the transparency of a fixed % charge of say 0.8% - 1.0% on the stakeholder schemes.

I want to start a pension fairly soon to take advantage of the tax breaks and to try and minimise the risk of a retiring as a pauper but I don't want something that is going to take up loads of time to research and manage. (That's why I should be using an IFA right?!)

**pmeswani** · 1 August 2009, 08:52

Originally posted by Colourful Contractor View Post

Had a look at the Hargreaves Lansdown website and it provides an impressive amt of information to help with investment decisions. I'm just not sure that I want to take such an active role in managing my pension, but I appreciate pmeswani's point that you don't necessarily have to be switching anymore than you would with a stakeholder pension and that with both you need to have an awareness of the market.

The charging structure for SIPPS looks more complicated though, I like the transparency of a fixed % charge of say 0.8% - 1.0% on the stakeholder schemes.

I want to start a pension fairly soon to take advantage of the tax breaks and to try and minimise the risk of a retiring as a pauper but I don't want something that is going to take up loads of time to research and manage. (That's why I should be using an IFA right?!)

It's not that complicated with a SIPP. Seriously.... it isn't. However, I think you have pretty much made up your mind with Cavendish (i.e. I think you are going to go with them), and wish you the best of luck. Personally, I think you are making a mistake with a Stakeholder Pension.

What a SIPP lacks in fees, rewards in success. With a stakeholder pension, you are limited to the types of funds you are investing, but with a SIPP, you have a wider range of funds available. With a Stakeholder, you will get a statement, probably, on an annual basis. So if things go badly wrong, you won't know about it until you get your statement. In which that time, what's the value of your pension? It won't be a reduction of 0.8% to 1.0%... it would be a lot more. With a SIPP, if things go wrong, you get to know about it before the year is up (Assuming that you monitor your pension regularly). You get to change your investment choices. You are in control. One shouldn't allow a third party to decide when you pension contributions should do well.

But that's just my opinion. Good luck with Cavendish.

**IR35 Avoider** · 2 August 2009, 15:52

I've used Cavendish, would always use them when buying any product from an insurance company. Even a cheap stakeholder from L&G will be significantly cheaper through them.

What I didn't realise is that when I wanted to transfer an existing protected rights pension from Prudential into an existing L&G pension account, I should have contacted Cavendish rather than L&G directly. What I thought would be a few weeks to transfer funds from one account to another turned into a nightmare taking more than a year where L&G told me to go through an IFA they nonimated. They were going to pay the fee, so I didn't resist, despite it being completely unclear to me why I needed "advice" to transfer pension funds from one provider to another slightly cheaper one. With hindsight I realised L&G were just following script designed to generate commission, and I should have gone through Cavendish to short-circuit that.

There are reasons why I would like a stakeholder, access to a cheap property fund, for example. (With an L&G stakeholder through Cavendish you can get access for a marginal cost of 0.3% a year, I think, look up the fees charged by property unit trust by way of comparison - 1.5% is probably typical - there're none I would touch.)

I do now have the majority of my funds with Sippdeal. This was meant to be temporary to take advantage of an opportunity, but after the admin nightmare with L&G I'm tempted to stay with Sippdeal and remove the remainder of my funds from L&G.

I've never understood the attraction of Hargreaves Lansdown. Alliance Trust Savings SIPP should be cheaper for funds, as they also refund all trail commission these days. I use Sippdeal to invest using ETFs and investment trusts, if I wanted to use unit trusts/OEICs I would use Alliance Trust.

**Colourful Contractor** · 2 August 2009, 16:01

Thanks for offering an alternative viewpoint pmeswani, good to hear as I'm not fully sold on the stakeholder route and am going to look into sipps more fully.

I do like the interface the HL service provides, allowing you to track your portfolio online and presumably alter contributions. I had a similar service with an employer scheme I had a few years ago and had rather assumed I would be able to manage the whole thing online, which doesn't seem to be the case with most stakeholder schemes, certainly not aviva.

I will look at the HL scheme when I'm back at a pc.

Thanks for the comments, any more on sipps gratefully received!

Cavendish Online for Pensions?