By James Thorneley Close Wealth Management, part of Close Brothers, is offering a Sipp product for t...
By James Thorneley
Close Wealth Management, part of Close Brothers, is offering a Sipp product for those with a minimum portfolio of £25,000.
The group claims the product has the lowest administration charges of its type, with a £550 establishment fee which includes the annual management fee of £275. The charges for managing the Sipp portfolio consist of a one-off start-up charge of 1.5% of the value of the new funds. An annual management fee of 1%pa of the value of the portfolio is charged quarterly in arrears. There are no specific charges for transferring into the product.
In addition, brokerage on equity transactions is 0.9% of the value of each trade and on bond transactions it is 0.5%. The minimum fund size for the product is £25,000. Personal Pension Management, owned by Winterthur Life, will act as trustee and administrator to the Sipp.
The first income withdrawal of the year, including regular payments by direct credit to a bank account will cost £100pa. Additional tranches of fund bought into income withdrawal will cost £50pa. Any additional income withdrawal in any year will cost £50 per payment.
Close Wealth Management will look to provide advice to clients on the underlying Sipp investments.
Martin Smith, managing director of Close Wealth Management, said: "We will tailor a mix of cash, fixed interest securities and equities to meet the risk profile of the investor. The asset mix will involve a sensible amount of diversification into the major stocks markets around the world. The mix is then actively managed to take advantage of the market movements."
The basic split between the asset classes will be altered depending on the risk tolerance and investment time horizons of clients.
For the medium term investor the group has presented three different risk profiles of investors, by asking the worst outcome they could tolerate over any one or two-year period. For the investor who can only tolerate a 3% fall over one-year or a 7% rise over two-years the group has suggested a portfolio structured with 75% bonds and 25% equities. This should produce an annual return over and above inflation of 5% according to Close.
For the investor who can tolerate a 7% fall and 7% rise over one- and two-year periods respectively the group said it would construct a portfolio consisting of 50% equities and 50% bonds which should produce an annual return over inflation of 6%. For the more aggressive medium term investor the group will structure a portfolio containing 75% equities and 25% bonds offering a 7% annual return above inflation.
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