SIPP newbie beginner question please? Is this right??

[BabyBentleyBlonde]

my plan is to open aj dodl

put 2800 (money I have now) in hsbc ftse all world

is this a good fund? Or is there a better fund?

is this right?? Am I making any mistakes?

im a complete newbie to investing and find it all complicated and worry I’m making a mistake

(have no private pension and sahm)

thank you

What I was told about SIPPs by a friend-of-a-friend who is an IFA:

SIPPs have higher charges than simpler Personal Pension funds because they give you the flexibility you need if you are finance savvy and are going to be reading the Financial Times regularly and making your own informed guesses about what is on the way up and what is on the way down, and rebalancing your investment portfolio on this basis at least monthly, possibly weekly or more.

If you are just going to pick a fund and leave your money there you are throwing away the money you are being charged for the SIPP arrangement.

I have no knowledge of the fund of which you speak but I don't think a SIPP was the thing you need. Does your agreement have a cooloff period within which you can cancel?

All the big providers have a simple Personal Pension product where you get access to a range of funds a and the charges are typically half that of a SIPP.

Your friend-of-a-friend is either wrong or you were having this conversation 15 years ago.

You need to look at all the charges, but if you’re investing in funds rather than more complicated assets then most SIPPs are really no different from other personal pensions these days.

I have a SIPP. Anything you put in gets tipped up by the government. When you get it out you get 25 percent tax free.

Which fund/what are you invested in if you don’t mind me asking

I’m just confused about which fund/investment to pick

so many

is hsbc ftse world a good fund?

Years ago I worked in a financial adjacent job and in our training we were told the SIPPs were for people who are financially savvy as its easy to lose your capital.

That’s a risk with any investment fund, though. Not unique to SIPPs.

SIPPs used to be a specialist product many years ago. In the main, “SIPP” is now largely used as a marketing term and many are pretty much indistinguishable from personal pensions.

Assuming you mean AJ Bell, this is a good, low cost SIPP provider. The website is easy to use and I've found their telephone staff helpful. They are very clear that they cannot offer you investment advice, but they are very good at helping you do what it is you want on their website.

The particular HSBC global tracker you mention is a decent, cheap, tracker fund which basically tracks the global stock markets. So it's value will go up and down with those markets. It is quite heavily weighted towards the US, simply because that's the most valuable. There is nothing wrong at all with this approach to starting a pension. And I think that HSBC fund is one of the cheapest (I actually looked at it myself a couple of weeks ago).

If you want to know in more detail what charges to expect, there is a calculator on their website. I just ran this, and for one fund purchase a year, with an account value of £10k (I'm assuming you invest more in future years and it has a bit of growth), the annual fees would be £26.50, plus the individual HSBC fund charge of 0.13% per year.

Agreed! That previous post is pure twaddle.

Sorry typo

Yes aj bell, their dodl investing app

Oh, and before you buy any fund on their website, you need to confirm you've read the key information about the investment you are buying. Don't just click this - make sure you do actually read the document. It will explain in (relatively) straightforward language what the fund is, how it operates, what the fees are. It's important information and is there to help you.

Ah ok, I don't know that app. I just use the standard AJ Bell one.

What I was told about SIPPs by a friend-of-a-friend who is an IFA:
SIPPs have higher charges than simpler Personal Pension funds because they give you the flexibility you need if you are finance savvy and are going to be reading the Financial Times regularly and making your own informed guesses about what is on the way up and what is on the way down, and rebalancing your investment portfolio on this basis at least monthly, possibly weekly or more

This is the kind of nonsense spouted by IFA to get people to pay them a fee to set up a pension - which often has a high fee attached to it.

You don't need to read the Financial Times - pensions do best when invested in passive funds. OP - go onto YouTube and do the Rebel Finance School course. You'll learn about platform fees and picking a fund. And it's completely free!

This

The SIPP is just a wrapper.

It can hold whatever assets you want ( .. and how risky it is, depends on the assets you choose e.g. I hold a lot of low risk things like cash right now as I am “retiring”this year)

If you and look on the main SIPP providers websites (e.g. Hargreaves Lansdown, AJ Bell and Interactive Investor). They will have a list of Funds / ETFs that are most popular with their customers.

It should be pretty obvious what most people are using to track the FTSE All World Index ( …. Spoiler it is not the HSBC Fund you mention)

I’m not going to make a recommendation but you can easily find one on the Pensioncraft YouTube channel. He has videos on best funds to pick and also explain why.

I’d also recommend Smarter Investing by Tim Hale. He explains a bit about how to construct a portfolio.

Well done for starting out on your pension investment OP.

Dodl is a great platform for beginner investors. Their platform charges on your initial investment are £12 a year - only £1 a month (1.5%). Cheaper and simpler to use than AJ Bell's main platform.

HSBC FTSE All World is an index tracker - an international equity tracker which tracks stocks from developed and emerging markets worldwide....a straightforward and popular choice for a SIPP with low fund fees (0.13%).

I have a Scottish Widows one. I chose Chevron, Total Energies, BHP group, Rio Tinto, Fortescue and Shell. So basically oils. It has done well over last few years.

It's good to spread your portfolio over several different ones to mitigate risks.

It was a long time ago. Thank you for the update.