New work pension(who to manage my funds)

The personal pension is with prudential and is a with profits fund,the adviser have told me i could do better by moving it into another personal pension in which he will take a 1% cut from.

Most of Prus pensions were adjusted in cost to make them have a bottom line of 1% p.a. (assuming 7% pa growth - they may cost more or less at different growth rates). So, the adviser cost of 1% will be on top of any replacement contract costs.

As for the company pension which is with friend life(joined with axxa i believe) you have a choice to choose there default fund or choose your own funds from quite a big selection.The default funds are all axxa funds set up as a lifestyle profile medium risk fund,the adviser said i could do alot better if i choose my own funds although there will be a charge for selecting funds that are not with axxa or friends life.

Alarm bells are now ringing.

The job of an IFA is to tell you where to invest. Not for you select it. FAs on the other hand (pre RDR - ie currently) mostly require you to choose where you invest. This would suggest it is not an IFA you are using but an FA. That would be the first no-no. You should not use tied sales reps.

Next one is a question on why are you paying the adviser 1% p.a. on the basis of potentially doing better (which can be a viable reason) but it is you that is having to pick the investments?

As the friends life pension is a work one the adviser can't take a % from it so is going to bill me £200 to £250 per year to manage my funds.

If you are picking the investments then it is you that is picking them. Not the adviser. So, why pay them?

My point is do i need to pay the adviser to manage these funds or will they be managed anyway by friends life

The fund house manages the investments within the fund but does not control the investment strategy being used in your portfolio. So, if you pick a UK equity fund, the fund house will manage UK equities. It wont decide how much you have in UK equities vs how much you should have in property, bonds, US equities etc. That is the job of the adviser.

if not would it be better to get a friends life adviser to manage my funds as they can take a % of the pension instead of paying out £200-£250 per year to my financial adviser.

Friends Life do not have advisers.

I have concerns based on what you have said and given these above. However, I also suspect there is possibly a misunderstanding (possibly the 1% you mention is the total cost and not what the adviser is getting or I could be getting the wrong end of the stick on some points)

My prudential pension which is frozen,the adviser is going to move it into a better performing pension and going to charge 1%,will he take 1% when the pension mature's or is it per year.

It wont be when it matures. It will either be 1% up front or 1% p.a. You need to be clear on which.

If you go in the default fund then you dont need the adviser. The default fund is there for the "lazy" investor. Wont be the best option but will be a cheap option. Using an adviser on a servicing basis for investment advice and going in default fund is a waste of money. If you start to use single sector/focused funds to built a spread of funds then these should be reviewed. Either by you or by the adviser. The adviser will be paid by you to do this.

Is the pension value big enough to make it worthwhile? Anything less than 10k then use default fund. Anything more than £50k then the adviser can add value. Anything less than that and its probably not worth using the adviser for £200pa but perhaps ad hoc every 4-5 years.