My wife needs to set up a SIPP to transfer from an existing personal pension

19 July 2021

Question by Guy

My wife needs to set up a SIPP (I already have one), to transfer from an existing personal pension that would not provide flexibility for drawing down at retirement. We are looking for an underlying investment portfolio that is managed for her without having to have too much understanding / involvement, but where the costs are reasonable for the services provided. So we want a solid SIPP platform (but that doesn't need to be too sophisticated, although a good mobile app would be nice), in combination with a well respected and typically good performing investment management product - both representing a good value for money. An example may be a Hargreaves Lansdown SIPP in conjunction with their Master Portfolios or Portfolio+... but are there fund value ranges where this kind of approach makes sense (or not), and/or what other ideas or competitors may be worthwhile considering? Also, is there a good web site for directly comparing historic returns of various investment management firms and their products, versus industry benchmarks, which may assist us in selecting something appropriate?

Answered by Boring Money

A SIPP would give you the flexibility you need yes, but a suitable personal pension may also fit the bill and the costs may be lower as you don’t need all the bells & whistles. Have a look at our Best Buys page and guide for comment, reviews and ratings. The top 5 all have investment options that fit the bill based on your requirements, just check which offer drawdown

This kind of approach has become very popular in recent years. Having a risk rated portfolio managed for you is very popular. This could be a fully bespoke discretionary portfolio, although that seems a bit excessive for you and would probably be the most expensive. A managed portfolio service or fund is simpler and more cost effective. You would need to decide whether you would prefer an actively managed approach, passive or a combination.

As well as the providers in the Best Buys section, popular fund managers used by clients with similar objectives to your own include Vanguard with their LifeStrategy funds, Seven Investment Management (7IM) with their AAP funds and Royal London with their Governed Portfolios.

Most providers have some form of research tool where you can compare returns. For an independent view, have a look at Trustnet from Financial Express.

Hope this helps!

Holly adds

AJ Bell Youinvest is probably worth a look – these guys have SIPP in their blood and the costs are typically decent. You can pick very simple low cost investment solutions such as their own brand passive funds – and then that’s just one investment to look at. Much the simplest and one of the lowest cost options.

Hargreaves Lansdown are very good and do have a decent app. They also don’t have loads of extra fiddly charges in drawdown so the costs are cleaner to understand. Their Portfolio+ is expensive and I think just too pricey. You may be better off either picking a selecting a list of funds from their recommended list – most people will have about 12-15 and make sure you diversify and have a good spread.

Or plump for something low-cost and easy like the Vanguard LifeStrategy funds. Won’t ever outperform but neither will you pay above the odds for lower than average performance.

Answered by

Boring Money