Discussion
My financial advisor manages my SIPP and offshore bond. It’s all performed ok but I’m just reviewing the charges:-
SIPP. - Platform charge 0.18%, Fund charge, .80%, Advisor charge .30%
Bond - Platform charge .32%, fund charge .75%, no Advisor charge
The result of this is that last year I paid £21,526.
I’m wondering about managing the whole thing myself through say Hargreaves Lansdown or another platform.
Any thoughts?
SIPP. - Platform charge 0.18%, Fund charge, .80%, Advisor charge .30%
Bond - Platform charge .32%, fund charge .75%, no Advisor charge
The result of this is that last year I paid £21,526.
I’m wondering about managing the whole thing myself through say Hargreaves Lansdown or another platform.
Any thoughts?
more info needed and all that.. but to be fair .30% is a low fee for an advisor.. obviously providing he's added value etc etc. I think I pay 0.80% advisor charges PLUS additional platform / fund fees so about 1.5 to 2.0% all in.
eta - just checked - I pay 0.70% Advisor charges (recently negotiated down from 0.80%). Drops to 0.50% on £1m pot..
eta - just checked - I pay 0.70% Advisor charges (recently negotiated down from 0.80%). Drops to 0.50% on £1m pot..
Edited by Phooey on Friday 24th August 19:58
bad company said:
My financial advisor manages my SIPP and offshore bond. It’s all performed ok but I’m just reviewing the charges:-
SIPP. - Platform charge 0.18%, Fund charge, .80%, Advisor charge .30%
Bond - Platform charge .32%, fund charge .75%, no Advisor charge
The result of this is that last year I paid £21,526.
I’m wondering about managing the whole thing myself through say Hargreaves Lansdown or another platform.
Any thoughts?
If you managed yourself, you would still need to pay for the admin (platform charge) and fund charges, unless you feel skilled enough to manage a portfolio of direct equities and binds yourself. The Adviser charge actually looks very reasonable.SIPP. - Platform charge 0.18%, Fund charge, .80%, Advisor charge .30%
Bond - Platform charge .32%, fund charge .75%, no Advisor charge
The result of this is that last year I paid £21,526.
I’m wondering about managing the whole thing myself through say Hargreaves Lansdown or another platform.
Any thoughts?
If it's performing OK, net of costs, why change?
Helicopter123 said:
If you managed yourself, you would still need to pay for the admin (platform charge) and fund charges, unless you feel skilled enough to manage a portfolio of direct equities and binds yourself. The Adviser charge actually looks very reasonable.
If it's performing OK, net of costs, why change?
Yes I get that and while I do manage a portfolio of shares in a (Halifax) nominee account but not sure I feel confident enough to take over th the SIPP.If it's performing OK, net of costs, why change?
Yes, it’s performing ok but I’m shocked at the costs v my drawings from it.
bad company said:
It’s all performed ok
How are you benchmarking it?bad company said:
Any thoughts?
What does he actually do for you? Without having the numbers (and not wanting to guess) I'd say it depends on whether he does something in addition to just "managing your money", which is pretty commoditised (and therefore cheap) these daysbad company said:
I’m wondering about managing the whole thing myself through say Hargreaves Lansdown or another platform.
Not saying you should or shouldn't, but it's worth bearing in mind how terribly the average punter performs with their investmentshttps://seekingalpha.com/article/4108688-investor-...
bad company said:
My financial advisor manages my SIPP and offshore bond. It’s all performed ok but I’m just reviewing the charges:-
SIPP. - Platform charge 0.18%, Fund charge, .80%, Advisor charge .30%
Bond - Platform charge .32%, fund charge .75%, no Advisor charge
The result of this is that last year I paid £21,526.
I’m wondering about managing the whole thing myself through say Hargreaves Lansdown or another platform.
Any thoughts?
It appears you are paying 1.28% on your SIPP (plus any underlying fund charges - so let's say 1.4% in total). With full advice this is very low cost.SIPP. - Platform charge 0.18%, Fund charge, .80%, Advisor charge .30%
Bond - Platform charge .32%, fund charge .75%, no Advisor charge
The result of this is that last year I paid £21,526.
I’m wondering about managing the whole thing myself through say Hargreaves Lansdown or another platform.
Any thoughts?
With HL you would be paying 0.45% platform cost and roughly the same for the funds (maybe 0.1% less) so about the same, but without any advice.
I would stick where you are if you are happy with the service, advice and performance.
However, as low as the fees are (relative to the market) they do represent a significant expense every year. There are cheaper (non-advised) alternatives if you are open to them.
JulianPH said:
It appears you are paying 1.28% on your SIPP (plus any underlying fund charges - so let's say 1.4% in total). With full advice this is very low cost.
With HL you would be paying 0.45% platform cost and roughly the same for the funds (maybe 0.1% less) so about the same, but without any advice.
I would stick where you are if you are happy with the service, advice and performance.
However, as low as the fees are (relative to the market) they do represent a significant expense every year. There are cheaper (non-advised) alternatives if you are open to them.
A non advised platform is what I’m thinking about. I already have an ISA and share portfolio with HL. By the way they do negotiate their fees for larger accounts.With HL you would be paying 0.45% platform cost and roughly the same for the funds (maybe 0.1% less) so about the same, but without any advice.
I would stick where you are if you are happy with the service, advice and performance.
However, as low as the fees are (relative to the market) they do represent a significant expense every year. There are cheaper (non-advised) alternatives if you are open to them.
bad company said:
A non advised platform is what I’m thinking about. I already have an ISA and share portfolio with HL. By the way they do negotiate their fees for larger accounts.
I know, I was going to tell you that in case you didn't already know!Your 'problem' (if it is one) is that you are already paying very low costs percentage wise, it is just that the sums involved make these costs very high in pounds and pence.
The industry, however, always charges on a percentage basis.
I know of some firms (Netwealth spring to mind) that specialise in managing high net worth portfolios at a lower cost, but still between 0.8% to 0.9%. I am sure I could help lower this figure for you though.
They also offer advice for a flat one-off fee as and when you need it. It is a few hundred quid and not a percentage of the assets involved.
This is a non-advised platform that has advisers ready should you need them. But it is not a self select platform (such as the HL one)
There are others, but that would include my own investment manager, and I don't want to break PH rules here, so PM me if you like. Otherwise have a look at Netwealth and post any queries back here.
Cheers!
55palfers said:
I wonder how all these financial bods would feel if their plumber charged for work based on a % of the value of their house?
IMO “advice” should be bought on a one-off basis for a fixed fee as and when you need it.Most damaging of all is the cumulative effect of the loss of return on fees paid to the adviser. Let’s say the adviser is pocketing £10,000 p.a. from a £2m fund through a decade where investment returns are 10% p.a.
In yr 1 the adviser costs you £10,000
In yr 2 the adviser costs you £11,000 (£10k plus the £1,000 of return you haven’t received as a result of last year’s fee)
In yr 3 the adviser costs you £12,100 (£10k plus the damage done by £2,000 of previous fees)
The cost to you has already been £33,100 and so it goes on.
By the end of the decade the advisor has received his £100,000 but the cost to you has been in the region of a whopping £160,000
rockin said:
IMO “advice” should be bought on a one-off basis for a fixed fee as and when you need it.
Most damaging of all is the cumulative effect of the loss of return on fees paid to the adviser. Let’s say the adviser is pocketing £10,000 p.a. from a £2m fund through a decade where investment returns are 10% p.a.
In yr 1 the adviser costs you £10,000
In yr 2 the adviser costs you £11,000 (£10k plus the £1,000 of return you haven’t received as a result of last year’s fee)
In yr 3 the adviser costs you £12,100 (£10k plus the damage done by £2,000 of previous fees)
The cost to you has already been £33,100 and so it goes on.
By the end of the decade the advisor has received his £100,000 but the cost to you has been in the region of a whopping £160,000
^^^This. Though, you have cut the typical adviser fee in half, it should be doubled.Most damaging of all is the cumulative effect of the loss of return on fees paid to the adviser. Let’s say the adviser is pocketing £10,000 p.a. from a £2m fund through a decade where investment returns are 10% p.a.
In yr 1 the adviser costs you £10,000
In yr 2 the adviser costs you £11,000 (£10k plus the £1,000 of return you haven’t received as a result of last year’s fee)
In yr 3 the adviser costs you £12,100 (£10k plus the damage done by £2,000 of previous fees)
The cost to you has already been £33,100 and so it goes on.
By the end of the decade the advisor has received his £100,000 but the cost to you has been in the region of a whopping £160,000
bad company said:
My financial advisor manages my SIPP and offshore bond. It’s all performed ok but I’m just reviewing the charges:-
SIPP. - Platform charge 0.18%, Fund charge, .80%, Advisor charge .30%
Bond - Platform charge .32%, fund charge .75%, no Advisor charge
The result of this is that last year I paid £21,526.
I’m wondering about managing the whole thing myself through say Hargreaves Lansdown or another platform.
Any thoughts?
Perhaps an alternative to focusing exclusive on fees, and its been highlighted how some of the charges are fixed or inherent in the products, instead compare the expense of having them with how much tax these structures saving you annually and/or are expected to save your estate on death?SIPP. - Platform charge 0.18%, Fund charge, .80%, Advisor charge .30%
Bond - Platform charge .32%, fund charge .75%, no Advisor charge
The result of this is that last year I paid £21,526.
I’m wondering about managing the whole thing myself through say Hargreaves Lansdown or another platform.
Any thoughts?
Tax free growth, 5% allowance from the Bond, the tax free cash form the SIPP and probably.
JulianPH said:
rockin said:
IMO “advice” should be bought on a one-off basis for a fixed fee as and when you need it.
Most damaging of all is the cumulative effect of the loss of return on fees paid to the adviser. Let’s say the adviser is pocketing £10,000 p.a. from a £2m fund through a decade where investment returns are 10% p.a.
In yr 1 the adviser costs you £10,000
In yr 2 the adviser costs you £11,000 (£10k plus the £1,000 of return you haven’t received as a result of last year’s fee)
In yr 3 the adviser costs you £12,100 (£10k plus the damage done by £2,000 of previous fees)
The cost to you has already been £33,100 and so it goes on.
By the end of the decade the advisor has received his £100,000 but the cost to you has been in the region of a whopping £160,000
^^^This. Though, you have cut the typical adviser fee in half, it should be doubled.Most damaging of all is the cumulative effect of the loss of return on fees paid to the adviser. Let’s say the adviser is pocketing £10,000 p.a. from a £2m fund through a decade where investment returns are 10% p.a.
In yr 1 the adviser costs you £10,000
In yr 2 the adviser costs you £11,000 (£10k plus the £1,000 of return you haven’t received as a result of last year’s fee)
In yr 3 the adviser costs you £12,100 (£10k plus the damage done by £2,000 of previous fees)
The cost to you has already been £33,100 and so it goes on.
By the end of the decade the advisor has received his £100,000 but the cost to you has been in the region of a whopping £160,000
For those who are not willing to pay for high-quality advice, often worth a multiple of cost in terms of tax saving (income, capital gains, LTA, IHT) and access to suitable products, then the DIY route is always open. If you are unprepared to identify and monitor fund managers, than a simple mix of tracker funds can be considered. There are alternatives, but beware if it goes wrong you have no come-back. With a regulated IFA or restricted adviser you have access to redress if things don't work out. For many, this alone is worth the adviser fee, it's almost an insurance policy.
In the example above, if my adviser returned 10% from a medium risk diversified portfolio, I would have little hesitation in paying his/her fee.
Campagnolo12speed said:
I can understand if none of the IFAs want to comment but what is the going rate percentage wise if anything on the contributions on the way in?
It will vary greatly is the truth, and not always based on the adviser.I had a client make a direct contribution to a plan with Aviva, no advice taken.
On reviewing his documents, a 5% charge had been deducted.
Had he come to me, he would have paid less.
Helicopter123 said:
Campagnolo12speed said:
I can understand if none of the IFAs want to comment but what is the going rate percentage wise if anything on the contributions on the way in?
It will vary greatly is the truth, and not always based on the adviser.I had a client make a direct contribution to a plan with Aviva, no advice taken.
On reviewing his documents, a 5% charge had been deducted.
Had he come to me, he would have paid less.
I was more thinking about regular monthly contributions throug an IFA?
Edited by Campagnolo12speed on Sunday 26th August 13:16
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