Hargreaves Lansdown SIPP or other options

[thistimenextyear]

A question for the knowledgeable PH masses if I may...

Perhaps it's my age group that has thought that pensions are not worthwhile (possibly incorrectly) which has meant I have never really cared for researching them or having a pension as a high priority. I have built a small property portfolio and this is where I have been investing so far 'nothing safer than bricks & mortar! ' etc.. but I think now is a good time to start a pension considering the tax relief available.

Having read many good reviews on HL, I've taken a look at their website and I have seen they offer a ready made SIPP which looks appealing.

At age 35, am I along the right lines thinking I should start with higher risk / higher growth potential? The ready made option seems to fit for me as I would not know where to start with choosing equities myself. I am a higher rate tax payer and a director if that makes any differences on where to open a SIPP.

Happy to take any advice you may have?

[troika]

HL is a good start because they allow Employer contributions. If you are a Director of your own company, you will probably want to do this and not all SIPP platforms are geared up for it.

[JulianPH]

Hi, well done for building up some property investments at your age for a start!

Pensions are nothing more than tax wrappers (or allowances), it is what you hold within them that counts.

Yes you are right, at 35 you should consider a higher risk/reward as you have the time to recover if markets move against you in the shorter term. Equally you would be wise to lower this as you approach wanting to access the money.

HL's managed portfolio option is very expensive though. Their service is brilliant, but you could be paying tens or hundreds of thousands for this over time. There are lower cost versions of exactly the same thing available.

I am reluctant to say have a look at AJ Bell, as it gets bad reviews on here for its tech and service levels, but the price difference is incredible.

As I say, there are many others at half the price of HL (which is still a higher price than AJ Bell) that still offer great service and tech.

[Croutons]

There is a reason both Hargreaves and Lansdown are billionaires.

The platform is nice, the marketing is slick. But. The "Wealth 100". It will be pushed. And it includes funds where others in the same sector (that even HL offer) have lower fees and better historic performance. I cannot reconcile this. "Whose wealth 100?" is what I'd like to know.

Any SIPP requires you to make your own investment decisions, ie you put cash in, and need to be comfortable then moving it to funds or shares. As I say, HL will proactively push you to some things, sending you monthly updates and glossies. Others will not.

Fwiw I compared AJBell with Charles Stanley Direct after recommendations on here. Much lower platform fees than HL. Less snazzy platforms. I went with the latter, who have increased their platform fee from 0.25 to 0.35%, which is annoying, but are helpful when I ask things (and I ask a fair amount), and I find their website adequate. It's hard to buy on the mobile site for example, which I suspect is not the case with HL, but they make enough cash to have a slick site. And billionaires. Did I mention that?

[Ginge R]

thistimenextyear said:

A question for the knowledgeable PH masses if I may...

Perhaps it's my age group that has thought that pensions are not worthwhile (possibly incorrectly) which has meant I have never really cared for researching them or having a pension as a high priority. I have built a small property portfolio and this is where I have been investing so far 'nothing safer than bricks & mortar! ' etc.. but I think now is a good time to start a pension considering the tax relief available.

Having read many good reviews on HL, I've taken a look at their website and I have seen they offer a ready made SIPP which looks appealing.

At age 35, am I along the right lines thinking I should start with higher risk / higher growth potential? The ready made option seems to fit for me as I would not know where to start with choosing equities myself. I am a higher rate tax payer and a director if that makes any differences on where to open a SIPP.

Happy to take any advice you may have?

Do you even need a SIPP? A lot of people confuse pension meaning income, and pension meaning ‘product’. It’s not advice, but consider the benefits of having a good personal pension instead. I have nothing against H-L, I think it’s a fabulous success story, and I get on well with many contacts there, and for some people it makes sense. But I do wonder if too many people dabbling in self investing think they know more than teams of pros running managed funds, do.

[jimmydash]

I'm with AJBell and have been for many years, service is great, personable, easily reached by secure email or phone. And.......................the price is right.

[dingg]

Ginge R said:

Do you even need a SIPP? A lot of people confuse pension meaning income, and pension meaning ‘product’. It’s not advice, but consider the benefits of having a good personal pension instead. I have nothing against H-L, I think it’s a fabulous success story, and I get on well with many contacts there, and for some people it makes sense. But I do wonder if too many people dabbling in self investing think they know more than teams of pros running managed funds, do.

I've been doing a lot of thinking over this very matter (sipp transfer from personal pension funds)

I have just took a chunk (25%) out of one fund I have administered by standard life , and left the balance invested in sl sli global smaller companies , I get a charges discount on the account due to the amount in it , no other fund platform provider could equal the charge from standard life , when the discount was taken into account.

I also have a similar amount in another pension fund administered by RL , currently in their lifestyle strategy product , I intend to keep adding to this fund until I retire (shortly) once retired I intend to change the fund to the GRIP 4 portfolio

Minimal amounts (if any at all) will be drawn down for the first 3 years of retirement.

I hold a sum in stock isa's and trade regularly in those accounts , I just thought it may be a better bet to leave the bulk of my investments where someone would be less reluctant to dabble than I would.

Plus it keeps the wife happy , she cannot forget the boom and bust of the tech late 90's early 2000 where we went up the mountain only to fall off the cliff in March 2000


eta ii looked the cheapest provider by my reckoning

Julian did recommend someone but they appear to have been taken over by another provider (its slipped my mind who they were)

Edited by dingg on Thursday 6th September 14:41

[FredClogs]

I have an HL SIPP, I think it's great, the platform charge is high at 0.45% but the discounts on some managed funds go some way to reducing the overall costs.

By using the HL fund research and wealth 150 list and the research notes and recommendations from Best Invest, Trust net and various investing blogs I believe I've built a portfolio that suits my goals and risk appetite with an overall charge levy of less than 1%. It takes time and you'll make a few mistakes but it's really not rocket science. I don't believe a managed private pension or robo adviser portfolio would give a better long term outcome than what I'm able to do within my own built portfolio, and it really doesn't require years of training and education, just a few weeks and some honesty with yourself on what's possible.

[JulianPH]

dingg said:

Julian did recommend someone but they appear to have been taken over by another provider (its slipped my mind who they were)

Hi mate, it was ClubFinance, and yes they have now been taken over and no longer offer this (shame really).

[JulianPH]

Ginge R said:

Do you even need a SIPP? A lot of people confuse pension meaning income, and pension meaning ‘product’. It’s not advice, but consider the benefits of having a good personal pension instead. I have nothing against H-L, I think it’s a fabulous success story, and I get on well with many contacts there, and for some people it makes sense. But I do wonder if too many people dabbling in self investing think they know more than teams of pros running managed funds, do.

A good question. Another is "Why would you not want a SIPP?".

No right or wrong answer to either, but your question is the equivalent to:

Why would you want an Independent Financial Adviser? Most people would be well served by a restricted, yet fully managed, personal pension that does not require any financial advice...

I think many people (or, as you say, "too many people") are self investing simply because of a lack of trust in financial advisers and a (natural) desire to save money on expensive advice fees. This is quite obvious.

What exactly qualifies you to say that "too many people" are making the decision to use companies like HL rather than pay financial advisers, such as you?

The reality is that some people will always want advice from an adviser who can access the whole market, just as some will always want a pension that can also access the whole market.

This does not make either of them wrong in any way.

[Ginge R]

FredClogs said:

I have an HL SIPP, I think it's great, the platform charge is high at 0.45% but the discounts on some managed funds go some way to reducing the overall costs.

By using the HL fund research and wealth 150 list and the research notes and recommendations from Best Invest, Trust net and various investing blogs I believe I've built a portfolio that suits my goals and risk appetite with an overall charge levy of less than 1%. It takes time and you'll make a few mistakes but it's really not rocket science. I don't believe a managed private pension or robo adviser portfolio would give a better long term outcome than what I'm able to do within my own built portfolio, and it really doesn't require years of training and education, just a few weeks and some honesty with yourself on what's possible.

That’s great. I’m pleased you have the service and the style of pension that suits you. One of the nice things about a personal pension is that it relies on the pooled clout and expertise of the fund manager to give you a good deal, and frees you to focus on the bigger picture/strategy. Sounds like you know what you’re doing.

[JulianPH]

Ginge R said:

One of the nice things about a personal pension is that it relies on the pooled clout and expertise of the fund manager to give you a good deal, and frees you to focus on the bigger picture/strategy. Sounds like you know what you’re doing.

Which is exactly the same with a SIPP, just with a greater choice of fund managers.

Though actually, that is not the case any more these days, as most personal pensions give access to a wide range of fund managers so there is no longer the difference that there used to be.

You do know that SIPPs are personal pensions don't you?

[thistimenextyear]

Thank you all for your replies on this subject. Definitely some food for thought and I need to research more into the providers listed.

I do note that one post suggested that only certain platforms allow you to make employer contributions. I would like to make transfers from my LTD company - is this the case?

I was initially drawn to HL because of the 'ready made' factor to keep it simple. Choosing your own equities for a bespoke setup seems to be the preferred option for many of you but to me, I am just left confused & baffled!

I think I need a 'Pensions for Dummies' book if one exists

[LivingTheDream]

I'm in a very similar position to you OP - I'm pretty sure I'm going with AJ Bell for a SIPP.

It will allow co contributions (although by cheque only unless you want to do a monthly DD?!?)

Pretty good range of investment options and price seems about right.

[FredClogs]

thistimenextyear said:

I do note that one post suggested that only certain platforms allow you to make employer contributions. I would like to make transfers from my LTD company - is this the case?

I don't think so, its certainly easy to do it with HL, you can set up all your DDs and payment on their website, other companies may be more paper based but its a fundamental of a pension that your emoyer can make monthly payments. Someone might be able to correct me on this.

[JulianPH]

FredClogs said:

thistimenextyear said:

I do note that one post suggested that only certain platforms allow you to make employer contributions. I would like to make transfers from my LTD company - is this the case?

I don't think so, its certainly easy to do it with HL, you can set up all your DDs and payment on their website, other companies may be more paper based but its a fundamental of a pension that your emoyer can make monthly payments. Someone might be able to correct me on this.

Correct. There was a post that implied this, but it is not correct. All pension/SIPP providers allow employer contributions.

[Derek Chevalier]

JulianPH said:

because of a lack of trust in financial advisers

I think it's a real shame, but understandable.

JulianPH said:

and a (natural) desire to save money on expensive advice fees.

I'd hope than an adviser would only engage with a client if they can more than add enough value (tangible and intangible) to cover their costs.

I guess it's all relative re expensive. Expensive relative to what? Say an architect charges £8k to design a £400,000 house refurb. What would you expect a (fee based) IFA to charge to work with a client to understand where they want to get to, build them a plan and work out the optimal way to achieve their goals?

[troika]

JulianPH said:

FredClogs said:

thistimenextyear said:

I do note that one post suggested that only certain platforms allow you to make employer contributions. I would like to make transfers from my LTD company - is this the case?

I don't think so, its certainly easy to do it with HL, you can set up all your DDs and payment on their website, other companies may be more paper based but its a fundamental of a pension that your emoyer can make monthly payments. Someone might be able to correct me on this.

Correct. There was a post that implied this, but it is not correct. All pension/SIPP providers allow employer contributions.

Well AJB didn’t want to take a £40K annual lump sum payment from my Ltd Co, said they don’t do it. In fact they didn’t really know much at all when I spoke with them. No problem with HL, in fact it couldn’t be simpler. As with most things in life, you generally get what you pay for.

[JulianPH]

Ginge R said:

Indeed, but there is a distinction. Which is why you told me a few months ago that you were reclassifying your SIPP as a PP. On advice, I shall say nothing more than that at the moment.

What is the distinction? This is a simple question.

[Ginge R]

JulianPH said:

What is the distinction? This is a simple question.

The only reason I popped on was because someone told me of your response(s). Have a great weekend mate.