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  • FIRST POST
    shane100
    New work pension(who to manage my funds)
    • #1
    • 6th Dec 12, 10:55 AM
    New work pension(who to manage my funds) 6th Dec 12 at 10:55 AM
    Hi,i have recently seen a financial adviser for some advice on a personal pension and a works pension.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.
    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.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.My point is do i need to pay the adviser to manage these funds or will they be managed anyway by friends life?,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.
    cheers shaun
    Last edited by shane100; 06-12-2012 at 10:57 AM.
Page 1
  • dunstonh
    • #2
    • 6th Dec 12, 11:21 AM
    • #2
    • 6th Dec 12, 11:21 AM
    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)
    I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • shane100
    • #3
    • 6th Dec 12, 12:21 PM
    • #3
    • 6th Dec 12, 12:21 PM
    Sorry for the confusing thread,it is a independent financial adviser i am using.He is choosing the funds for me for free but going to charge 200 per year to manage these funds(company pension).Although no price has been set yet of the cost of the adviser to manage my pension funds.

    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.

    P.S I no nothing about pension's so just asking is 200 a fair figure to charge per year(company pension)from a adviser to manage my company pension funds.
    cheers shaun
    Last edited by shane100; 06-12-2012 at 12:26 PM.
  • dunstonh
    • #4
    • 6th Dec 12, 12:41 PM
    • #4
    • 6th Dec 12, 12:41 PM
    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.
    I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • shane100
    • #5
    • 6th Dec 12, 10:47 PM
    • #5
    • 6th Dec 12, 10:47 PM
    Thank you for last thread,funds are being chosen by my adviser so should i pay him 200 p.a to manage them or just review them say once a year?
  • dunstonh
    • #6
    • 6th Dec 12, 11:19 PM
    • #6
    • 6th Dec 12, 11:19 PM
    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.
    I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • shane100
    • #7
    • 6th Dec 12, 11:45 PM
    • #7
    • 6th Dec 12, 11:45 PM
    This is a company pension that i am just about to start so should i just choose defaults funds and be done with it.
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