Opportunity
- John is satisfied with the investment strategy of his pension assets.
- John is cost-conscious and always keen cut unnecessary costs when he can.
Background
- John has pension assets of £250,000 on a platform recommended by his previous adviser many years ago, with a platform portfolio managed by a DFM.
- The pension wrapper is provided by the platform provider at no additional cost.
- Following research, John’s adviser Mark saw no need switch platform, as the charges were competitive compared to the alternatives.
- Mark receives a reporting pack from the DFM every six months, and discusses the portfolio’s performance as part of his regular client meeting with John.
The Solution
- John transfers his pension assets into a Solo SIPP.
- The pension funds are taken off platform and are invested directly in the DFM’s Model Portfolio Service.
- John has reduced his annual costs by two thirds – as the Solo SIPP costs just £241 pa, equivalent to 0.11% compared to the platform charge of 0.33%1.
Additional Benefits
- As the value of John’s pension grows, having a fixed charge instead of a percentage-based fee means the annual saving will grow too.
- Should John require additional investment flexibility in the future, he can switch SIPP products without the hassle of switching pension provider.
1 Source, The Lang Cat, February 2020
Business Funding using Existing Premises
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