Monthly drip feed investment for a 40 yr horizon

[TUK020]

Background & Intent
As I am moving into retirement, I am trying to review a lot of aspects of my finances and admin.
I have several children in their 20s, and want to help set them up, whilst avoiding the risk of them getting clobbered by IHT.
Separately, I have S&S ISA/LISAs in each of their names, and contributions to build a pot for use as a house deposit etc.
I would like to get them started on saving into a SIPP, and would like to gift them a small but regular amount from surplus income to start building a pension pot.

Objective
I would like to pick a SIPP platform that is durable, reputable and organize a standing order to be invested in a collective investment, with minimal overall costs, with a very long term investment horizon.

What is of concern
Platform durability and security
Platform costs, particularly as this will start small, but hopefully will snowball in the long term.
Dealing costs - how to minimise monthly dealing costs/reinvestments
Investment long term gain
Minimise administration
Low risk of permanent loss (stress this is not the same thing as volatility)

What is not of concern
Short term volatility

Questions?
Which platform would folks recommend?
How can this be set up for a low cost monthly investment/reinvestment?
What market tracker would folks recommend? particular point is question of whether a global mid caps tracker would be better than a straight global tracker for the very long haul?

I expect the outcome to be something like a Vanguard SIPP platform, with an automatic investment into a Global Small Cap Index fund, accumulation version, but would like to validate that idea using the accumulated wisdom of this site.

[RockRabbit]

I think your overall plan is excellent. My comments are:

1. Now that your children are over 18, I don't think that you can directly contribute to their SIPPs. (only personal or employer contributions are allowed). Therefore you will need to fund via a bank account held in their individual names. Their annual SIPP contributions will of course need to take into account their individual personal circumstances (ie income, whether they make pension contributions to an employer scheme etc).

2. I use AJ Bell for SIPPS (https://www.youinvest.co.uk/sipp). I fund the SIPP annually and then use their monthly savings function to buy ITs from the cash held in the SIPP. They do charge for each deal though, which I think is £1.50 for monthly investments. The annual SIPP fee is currently capped at £120 (+ VAT?) but is less for smaller amounts. Charges are clearly set out on web site.

3. I considered the Vanguard wrapper but dismissed it because at the time there did not appear to be an annual fee cap and I wanted the flexibility to invest beyond etfs. I may use it at some point however.

4. Having said that, for the purpose you describe, I would be very happy investing on a LT basis in VHYL (all world high dividend) or VWRL (all world). I currently do a LT drip feed into VHYL, which iI may split between VHYL and VWRL if US tech prices fall to more reasonable levels. However other etf providers, eg iShares, provide a much wider choice of etfs than Vanguard.

5. I believe that you can do M/S in Vanguard etfs for free on ii platform, but I personally prefer the AJ Bell platform.

6. AJ Bell are pension specialists who also have ISAs etc. Most of the other platforms started out with ISAs and then moved into SIPPs. Some providers are simply wrappers for other providers' SIPPs. AJ Bell is a listed company so you can check their accounts etc.

7. AJ Bell currently has a rather clunky log in procedure. I believe that is due to change soon.

[TUK020]

I think your overall plan is excellent. My comments are:

1. Now that your children are over 18, I don't think that you can directly contribute to their SIPPs. (only personal or employer contributions are allowed). Therefore you will need to fund via a bank account held in their individual names. Their annual SIPP contributions will of course need to take into account their individual personal circumstances (ie income, whether they make pension contributions to an employer scheme etc).

2. I use AJ Bell for SIPPS (https://www.youinvest.co.uk/sipp). I fund the SIPP annually and then use their monthly savings function to buy ITs from the cash held in the SIPP. They do charge for each deal though, which I think is £1.50 for monthly investments. The annual SIPP fee is currently capped at £120 (+ VAT?) but is less for smaller amounts. Charges are clearly set out on web site.

3. I considered the Vanguard wrapper but dismissed it because at the time there did not appear to be an annual fee cap and I wanted the flexibility to invest beyond etfs. I may use it at some point however.

4. Having said that, for the purpose you describe, I would be very happy investing on a LT basis in VHYL (all world high dividend) or VWRL (all world). I currently do a LT drip feed into VHYL, which iI may split between VHYL and VWRL if US tech prices fall to more reasonable levels. However other etf providers, eg iShares, provide a much wider choice of etfs than Vanguard.

5. I believe that you can do M/S in Vanguard etfs for free on ii platform, but I personally prefer the AJ Bell platform.

6. AJ Bell are pension specialists who also have ISAs etc. Most of the other platforms started out with ISAs and then moved into SIPPs. Some providers are simply wrappers for other providers' SIPPs. AJ Bell is a listed company so you can check their accounts etc.

7. AJ Bell currently has a rather clunky log in procedure. I believe that is due to change soon.

Thank you for your helpful response.

1. Kids over 18. Understood, I currently do their ISAs by Standing Order to their bank accoount, and then back to back SO to the ISA.

2. I have taken a closer look at Vanguard vs AJ Bell fees.
AJ Bell SIPP platform fee charges 0.25% on Shares, ITs, ETFs up to max £120/year. Regular Investment fee £1.50
Vanguard platform fee 0.15% up to max £375. Regular investment £0.
When you play with the numbers, Vanguard works out better deal on platform charges up to a pot size of £80k. Interesting that for monthly contributions that I envisage (£75-100), the regular investment fee makes a bigger difference. Don't know if there is a minimum transaction size.

3. Noted above £375.

4. For this level of drip feed, I suspect it makes sense to pick just one global fund, and Vanguard should be able to offer me what I am looking for. I think VWRP is the accumulation version of the all world all cap. Rather annoyingly, the Vanguard website doesn't easily identify the EPICs for their various funds, or at least, I haven't found it.

5,6,7. Noted

Further rummaging on the web is needed, I think I need to spend some time on this.
Reassuring that you are thinking along the same lines
thanks

[Wuffle]

Ask the kids to read the small print on their own company benefits.
They won't have.
There might be some employer contributions available if you just bung them the cash.

W.

[TUK020]

Ask the kids to read the small print on their own company benefits.
They won't have.
There might be some employer contributions available if you just bung them the cash.

W.

Only one of them is in employment with decent pension options, and he is already maxed on that.
Good point though, need to stress to them that this is a default, and they need to review if better options present themselves

[RockRabbit]

A few further thoughts ...

1. Which ever platform you choose, it is likely that in the LT it will be taken over, merged, or cease retail trading, with all the hassle that entails (especially if you are no longer around to sort it out). Vanguard is probably the most likely to be around for the LT, as I don't think they can be taken over due to their structure and size.

2. To spread the fraud and maladministration risk, I would use a different platform provider for the SIPP than for the ISAs. (but this does increase admin burden)

3. I found it much easier to invest for under 18 years old than for adults. You have to be more careful with adults in case they go and open an ISA themselves (but don't tell you), and its probably a good idea to have some idea of what they are earning and perhaps whether they are contributing to another pension scheme.

4. Keep good records for IHT purposes. See this thread if you haven't already: viewtopic.php?f=49&t=32909