In the first part of our Investor’s Guide To SIPPs, we covered the basics, explaining that SIPPs are long-term, tax-efficient investments designed to provide investors with more control and flexibility over how their retirement funds are managed. They can be thought of as “DIY” pension that allow you to manage your investments via an online platform.
Finding a SIPP that’s right for you can be a confusing and long-winded process. But it doesn’t have to be. Here are some tips on what to look for.
Pause for a moment
Before doing anything, ask yourself if you really need a SIPP. Are you confident enough to take control of your retirement funds? Do you have enough time to manage your own investments?
A SIPP certainly isn’t for everyone. But for financially literate investors who want more flexibility and control over how their retirement funds are managed, they can be a great option. If you’re not sure, it’s worth seeking the advice of an Independent Financial Advisor, who can work through your options.
Think big picture
There are tonnes of SIPP providers vying for your money, so where to start?
It’s tempting to begin by comparing fees. Value for money is clearly an important consideration when thinking about your retirement planning, but getting bogged down in price comparisons can lead to lead to confusion and inertia.
It’s far better to think about the type of investments you want to make for your retirement. What asset classes, sectors and geographies are you looking to gain exposure to? SIPPs can hold many different investments but many don’t offer the full range. So ensuring that your SIPP provides access to the right investment category for you is critical.
Returns are a critical part of this. Different investments perform in different ways according to a plethora of factors. Once you’ve considered the different investment options and their suitability with regards to your financial objectives, you will be well positioned to compare service offerings and fees.
Get a handle on costs
Once you have a list of SIPP providers that offer the investment products you need, it’s time to consider costs.
It’s hard to compare apples with apples when it comes to SIPPs, since providers use…
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