I sold my company and retired in 2018, I had a SIPP with £200K in it and asked an IFA if they would look after it for me, and to be honest I left them to it. I now have a SIPP with £196K in it according to my latest statement.
It is invested with Standard Life and three funds; SL ASI My Folio Managed 111 Pension fund, SL ASI My Folio Managed 11 Pension Fund, & SL Merian UK MID CAP Pension Fund. The charges are 1.365%, 1.305%, and 1.855% respectively.
The charges seem rather high to me, to say it is not doing anything. Plus the IFA wants a slice of the action.
So I have dumped the IFA, and am looking for a new home for the SIPP.
I have 3 questions for you if you don't mind: 1) Are these charges high? 2) I would like to move the SIPP. I have quite a lot going on with Hargreaves Lansdown and would like to use another platform, but it needs to be easy to set up and run, as I am 75 now and keep forgetting I have dementia (according to she who must be obeyed). So do you have any recommendations? 3) Or do you think I should just leave it where it is? Thanking you in anticipation.
Thanks for your question. I'll give you some general pointers to consider, but I'm not allowed to give you personalised financial advice, so these are general pointers only.
Fees for financial advice
In general, people with a financial advisor should expect to pay about 2% to 2.2% every year for the whole package. This includes financial advice investments and administration. I don't know what your advisor was charging you, but it should have been somewhere in this range.
You can lower the fees if you look at passive investment options. Of course debate rages about whether these low cost vehicles are the best home for your money or not. If you are using a financial adviser who uses passive investment options, then you might typically expect the fees to be closer to about 1.5% all-in on an annual basis. So that gives you something to gauge how the fees you were being charged stack up.
Now onto your second point where you say you have quite a lot going on with Hargreaves Lansdown. There's a lot to be said for having all of your investments with one platform, although this can feel counter-intuitive for many people. After all, we're told not to put all our eggs into one basket.
The money you hold with investment platforms is held in segregated client accounts, and so should that firm go bust your money is protected. So I tend to think that the easier administration can mean it's not a bad idea to use just one platform for your investments where possible.
If Hargreaves works well for you, then I'd question why you would look elsewhere to open up the SIPP. If however, you prefer to look elsewhere then I'd suggest you have a look at AJ Bell Youinvest. They are pensions experts and run what is a lower cost platform than Hargreaves Lansdown, but still a decent option.
A final consideration
I guess my final observation would be to consider what the value of financial advice is to you. Forgive me if this is clumsy, and I have no personal experience of dementia, but I would imagine that peace of mind becomes increasingly important?
I don't know how financially savvy she who must be obeyed is, but I wonder if she would feel more comfortable if there were a trusted financial advisor in the loop with you? Sometimes paying for someone to do some of the heavy lifting can be a worthwhile investment.
If you didn't particularly like or trust your former IFA, is it worth at least having a conversation with a few other potential candidates to see if any of them make you feel more comfortable.
Good luck, and I hope this is helpful!
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