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For use by professional advisers and for information purposes only

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 £231 pa, equivalent to 0.09% compared to the platform charge of 0.31%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, November 2017

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