I took that into account and checked 10 funds that I was interested in and the charges were the same on both platforms so went with fidelity.Originally Posted by PhilT
I think people get focused on choosing fund with a HL discount rather than choosing the best funds AFTER fees.
Is anyone investing for income? Presumably once you actually retire one would move from accumulation to income funds within the SIPP?
This is an interesting site that lets you create a virtual portfolio showing the income you would have received and when - https://www.theaic.co.uk/income-finder/income-builder.
It's a shame the choice funds is restricted (no Vanguard) but there are some seemingly impossibly spectacular returns from Venture Capital Trusts .
- Baillie Gifford Managed
- Fundsmith Equity
- LF Lindsell Train UK Equity
- Lindsell Train Global Equity
- Stewart Investors Asia Pacific Leaders
Anyone else into the same funds?[/QUOTE]
I would be interested to know what your entry costs were for the two Lindsell funds. Morningstar are saying 4% entry plus apprx 1% ongoing charges. Thanks in advance
Tyndall Global
Crux UK
Personal Assets Trust
Odey Swan
Lindsell Train Global
Third Point
I think that's all of them
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If you invest via a platform like Hargreaves Lansdown the initial charge is waived & the annual charge is about 0.51% (depends on exactly which fund). Adding the HL platform fee of 0.45% gives an overall charge of around 0.96%. Other platforms may be cheaper but HL may get a substantial discount from LT due to their close association.I would be interested to know what your entry costs were for the two Lindsell funds. Morningstar are saying 4% entry plus apprx 1% ongoing charges. Thanks in advance
Well I have holdings in:
HL Select UK Growth
Findlay Park American
Smithson Investment trust
Fundsmith
Lindsell Train Global Equity
Although most of my holdings are in individual stocks.
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I feel really out of my depth with pensions. I have a few pots including one that my employee currently pays into. The pot that gives me most concern is one that is managed by a small provider which doesn't contains a huge amount of money but a significant amount consolidated from previous pots. The platform they use is Old Mutual which annually cost me 1% adviser fee, £77 platform charge and 1.27% weighted platform fee (e.g overall 2.27%). The pots growth is poor in part I'm guessing due to the cost of running it. Can someone please steer me in the direction of a sensible route forward?
If that was me I'd switch to Hargreaves Lansdowne and stick the lot into an index tracker such as Vanguard Lifestrategy. Total fees (including the SIPP fee) would be around 0.67% a year and that makes a huge difference due to the power of compounding
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Typically my clients pay 0.2% platform fee and 0.5% adviser charge - so on the face of it you are hemorrhaging 1.5% pa which is a lot. I’d start with approaching your adviser and asking why platform charges are not more competitive (since his 1% fee is meant to include appraisal of your current platform and whether it remains suitable / competitive). There may be a reason why it’s worth 1.25% to be on the old mutual platform but I can’t think of one
2.27% is a substantial level of charges to be paying & if I were paying that I'd be very clear about expecting a very high rate of return that significantly beats any comparable funds which you don't seem to be getting. I suspect you are overpaying by at least 1.2% which has a very significant effect on growth & the amount you will retire with.
On another forum a very knowledgeable poster said this about the effect of a 1% charge (edited for brevity):
Whether you should move your pension to a SIPP run by the likes of Hargreaves Lansdown (there are other cheaper platforms) might depend on the exact terms of your pension but it must be worth considering. At the very least you should get your adviser to provide post charge performance figures for the last 10 years so you can see how well the investment is performing. Annualised 10 year growth of nearly 11% after charges has been seen, although of course this may or may not continue.On the basis (as I did not know the OP's exact circumstances) of using round numbers based on:
£100,000 fund value
£1,000 flat monthly contributions
7% average annual return after fund charges
30 years of growth (the OP is 35) and 20 years of income drawdown
The answer was the annual 1% adviser fee cost the client c. £1,000,000 on his £460,000 of total lifetime contributions.
So the adviser charge was reducing the pot at a rate of over twice the amount the client invested, with the client taking all of the investment risk and the adviser taking none of this.
I said I would post other examples here, but as none will accurately represent those of each individual, I will only give a handful of examples. I am not aiming to devalue financial advice, simply to enable you to understand the cost of such financial advice, so you are able to come to your own conclusions.
Quick Samples
The impact of a 1% annual adviser charge - everything else being based upon a 7% average annual return after investment (and platform) charges:
£50,000 invested for 30 years = c. £100,000 loss.
£100,000 invested for 30 years = c. £200,000 loss
£1,000 a month invested over 30 years = c. £210,000 loss
£2,000 a month invested over 30 years = c. £420,000 loss
So my basic message is that you need to be certain you are receiving some pretty stupendous 'value' for such fees (I doubt you are though).
Obviously having a qualified and experienced financial professional available can indeed add value. But can they add more value than the compound growth you could have received on the total amount of money you invest over your lifetime (without their fees)? I think not. It is financial planning (not transactional financial advice) that adds the most value.
I’m with OM but pay around 0.8%on a significant fund. If you don’t have a “huge amount” then 1% advisor fee may not be very much in £ terms. What funds is it invested in and what are the charges on those?... or is that your 1.27? Is it the collective retirement account.
You need to question your advisor and move it elsewhere if you don’t get the answers.
Thank you for all your thoughts - you have confirmed my instinct. The pot is slightly less than 100K and I've had it with this company for a couple of years. In that time the performance has been okay but nothing outstanding. I will investigate alternative options.
Anyone tried this new trust fund.
https://www.moneywise.co.uk/news/201...vestment-trust
Don’t forget that investment trusts are geared and therefore growth and falls can be inflated either way. A whole new level of risk to consider - certainly not suitable for all.
Yes, I am in Smithson. I bought at launch, and topped up since then. It has done very well. I suspect that this will probably be a long term holding for me, which I will continue to add to.
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