DFM & IFA SIPP fees

[giles panizzi]

There are a lot of knowledgable individuals on this forum so here goes.....

I opted out of DB scheme and took CETV. Money went into SIPP product and is now being invested by an investment house on a bespoke service. Now the transfer exercise has been complete for 5 months and I'm starting to pay ongoing fees - I'm thinking what am I getting for my buck!!

I current pay a % to IFA and % to investment house. My original take was give them 5 years to prove their worth, I have time on my side. In total fees add up to 1.6% per annum.

Thoughts appreciated.....

[WindyCommon]

giles panizzi said:

There are a lot of knowledgable individuals on this forum so here goes.....

I opted out of DB scheme and took CETV. Money went into SIPP product and is now being invested by an investment house on a bespoke service. Now the transfer exercise has been complete for 5 months and I'm starting to pay ongoing fees - I'm thinking what am I getting for my buck!!

I current pay a % to IFA and % to investment house. My original take was give them 5 years to prove their worth, I have time on my side. In total fees add up to 1.6% per annum.

Thoughts appreciated.....

Can you help me understand what you mean by bespoke here? Do you have specific/unusual investment requirements?

[mikeiow]

giles panizzi said:

There are a lot of knowledgable individuals on this forum so here goes.....

I opted out of DB scheme and took CETV.

I'm not overly knowledgable, but I always thought perceived wisdom was to almost never move away from a DB scheme......what persuaded you to take that step?
I have a small piece of DB in one of 4 pensions (from a few years at a local authority), and advice I have had over the years (not lately, tbh) was that the advisors would almost NEVER suggest moving that out.

[ellroy]

Total fees or total fee to the adviser and discretionary fund manager?

You want to look at the total expense ratio. If there are any third party fund costs they would likely be in addition to adviser fee and discretionary fund fee. And then of course there's the SIPP fees as well to account for.

[JulianPH]

You also don't mention the SIPP provider's fee, is that included in the 1.6%?

If you tell us the name of the SIPP provider and the DFM we can work this out and be more helpful.

Your adviser has absolutely nothing whatsoever to do with your investment returns - that is delivered entirely by the DFM - other than detract from them by way of taking their annual fees.

So unless they are using this fee to subsidise other services they are performing for you our using it to cover regular meetings where they reassess the DFM position you would possibly be better without paying them this unless their presence and hand holding is something that you value for this annual fee (which can often, but not always, be the case).

[craig1912]

mikeiow said:

I'm not overly knowledgable, but I always thought perceived wisdom was to almost never move away from a DB scheme

It was and in a lot of cases still is. CETVs have been at an all time high due to gilt yields. I transferred out of a DB scheme and it can be potentially life changing. I now have the ability to retire early with greater income than my DB scheme would have given me and with greater flexibility to vary income, take more TFC etc. It isn't the best advice for everyone but suited me.