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  • FIRST POST
    • APhil
    • By APhil 19th Jun 17, 9:24 AM
    • 7Posts
    • 0Thanks
    APhil
    IFA Fees for Pension Advice
    • #1
    • 19th Jun 17, 9:24 AM
    IFA Fees for Pension Advice 19th Jun 17 at 9:24 AM
    Hi
    My pension is currently with National Mutual and is giving me a fairly average return. My IFA has proposed a new pension provider which he thinks will give me a better growth of 7-8% per year, which is great. This will cost me around 1.24 % per year whch is paid to the pension company and the also gets payment from, He says though that there is also a one off fee paid to his company of 5%. This is 5% of my total Pension Pot (and comes out off my Pension pot ). Currently this would amount to a one off payment of almost £8000. I looked abit shocked and he offered to drop it down to 4%. Even so this sound a little excessive to me.

    Is this excessive ?

    any advice is greatly received,

    Many thanks

    Neil
Page 1
    • Malthusian
    • By Malthusian 19th Jun 17, 9:44 AM
    • 3,421 Posts
    • 5,237 Thanks
    Malthusian
    • #2
    • 19th Jun 17, 9:44 AM
    • #2
    • 19th Jun 17, 9:44 AM
    Yes, it's excessive. And he has no idea what the annual growth rate will be.

    What is he proposing to invest your new pension in, and how is it so different from the National Mutual pension?
    • APhil
    • By APhil 19th Jun 17, 9:50 AM
    • 7 Posts
    • 0 Thanks
    APhil
    • #3
    • 19th Jun 17, 9:50 AM
    • #3
    • 19th Jun 17, 9:50 AM
    He says that the new pension is more managed - on a monthly basis as opposed to the generally managed pension that I have already,

    His growth is an estimate I guess ?
    • dunstonh
    • By dunstonh 19th Jun 17, 10:07 AM
    • 89,840 Posts
    • 56,490 Thanks
    dunstonh
    • #4
    • 19th Jun 17, 10:07 AM
    • #4
    • 19th Jun 17, 10:07 AM
    This will cost me around 1.24 % per year whch is paid to the pension company and the also gets payment from
    That is in the ballpark of expectation assuming, as you say, it covers all charges (adviser/fund/platform/provider) and includes ongoing servicing. if it excluded ongoing servicing, then it would be around 0.5% ish

    He says though that there is also a one off fee paid to his company of 5%. This is 5% of my total Pension Pot (and comes out off my Pension pot ). Currently this would amount to a one off payment of almost £8000.
    Now that is extremely high. No-one should be paying as much as that for a pension switch. Typically no more than £2000.

    Investment returns are unknown. There can be valid reasons for moving old pensions into modern ones but they really need to be more solid than "better returns". Technically, a potentially better return can be used if you were in an investment fund that was consistently poor performing (such as a zombie with profits fund) and there were no other funds available on the existing pension and you are moving it onto a modern alternative with better potential. However, I don't know if the phrasing about getting better growth of 7-8% a year is yours or exactly what the adviser said but using wording like that is not good as nobody knows what the future is going to be.


    He says that the new pension is more managed - on a monthly basis as opposed to the generally managed pension that I have already,
    That is the language of BS.
    I am an Independent Financial Adviser (IFA). 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 an Independent Financial Adviser local to you.
    • Linton
    • By Linton 19th Jun 17, 10:20 AM
    • 8,594 Posts
    • 8,563 Thanks
    Linton
    • #5
    • 19th Jun 17, 10:20 AM
    • #5
    • 19th Jun 17, 10:20 AM
    He says that the new pension is more managed - on a monthly basis as opposed to the generally managed pension that I have already,

    His growth is an estimate I guess ?
    Originally posted by APhil
    This sounds nonsense. You dont need to manage a £160K portfolio on a monthy basis. If he is talking about the funds themselves any management would be done continuously. What investments do you have in National Mutual and what is being proposed? Was the IFA involved in the NM pension or has he come on the scene subsequently?

    I have never heard of National Mutual. Google tells me that it was taken over by GE Capital in 2001 and closed to new business. It has been a dormant company since then. NM seems to have been absorbed by Windsor Life who were involved in many complaints a few years ago. After then I cant find anything.
    • bostonerimus
    • By bostonerimus 19th Jun 17, 1:26 PM
    • 1,211 Posts
    • 668 Thanks
    bostonerimus
    • #6
    • 19th Jun 17, 1:26 PM
    • #6
    • 19th Jun 17, 1:26 PM
    I don't like the idea of paying an IFA for ongoing advice or any actively managed pension product with fees as high as you mention. Your IFA seems to be saying some pretty silly things......If anyone dangled an 8% carrot in front of me, I'd walk away.
    Misanthrope in search of similar for mutual loathing
    • AnotherJoe
    • By AnotherJoe 19th Jun 17, 1:44 PM
    • 7,664 Posts
    • 8,277 Thanks
    AnotherJoe
    • #7
    • 19th Jun 17, 1:44 PM
    • #7
    • 19th Jun 17, 1:44 PM
    You need to find an IFA that's not trying to rip you off, which this one is.
    • TrickyDicky101
    • By TrickyDicky101 19th Jun 17, 1:56 PM
    • 2,823 Posts
    • 1,828 Thanks
    TrickyDicky101
    • #8
    • 19th Jun 17, 1:56 PM
    • #8
    • 19th Jun 17, 1:56 PM
    This sounds nonsense. You dont need to manage a £160K portfolio on a monthy basis. If he is talking about the funds themselves any management would be done continuously. What investments do you have in National Mutual and what is being proposed? Was the IFA involved in the NM pension or has he come on the scene subsequently?

    I have never heard of National Mutual. Google tells me that it was taken over by GE Capital in 2001 and closed to new business. It has been a dormant company since then. NM seems to have been absorbed by Windsor Life who were involved in many complaints a few years ago. After then I cant find anything.
    Originally posted by Linton
    If OP's 'pot' was held by Windsor Life then it will now be held by ReAssure. If it is also within a With Profits policy then these are Dunstonh's "zombie" funds.
    • APhil
    • By APhil 20th Jun 17, 3:53 PM
    • 7 Posts
    • 0 Thanks
    APhil
    • #9
    • 20th Jun 17, 3:53 PM
    • #9
    • 20th Jun 17, 3:53 PM
    Hi, big thanks for all your replies, it's all really helpful. My current Pension is actually with Old Mutual ( I was close)The new company describe themselves as a boutique Firm, a discretionary Fund manager, Neil
    • APhil
    • By APhil 20th Jun 17, 3:54 PM
    • 7 Posts
    • 0 Thanks
    APhil
    My current Pension is actually with Old Mutual ( I was close)The new company describe themselves as a boutique Firm, a discretionary Fund manager, Neil
    • maximumgardener
    • By maximumgardener 20th Jun 17, 4:30 PM
    • 259 Posts
    • 109 Thanks
    maximumgardener
    don't get sucked in !!

    Old Mutual are a very reputable outfit.....so thats a plus.

    you should visit another couple IFA's and get some different "inputs" based on what you want to achieve
    • dunstonh
    • By dunstonh 20th Jun 17, 4:54 PM
    • 89,840 Posts
    • 56,490 Thanks
    dunstonh
    Hi, big thanks for all your replies, it's all really helpful. My current Pension is actually with Old Mutual ( I was close)The new company describe themselves as a boutique Firm, a discretionary Fund manager, Neil
    Old Mutual Wealth Life or Old Mutual Wealth platform? - big difference between these two. However, as a provider they are fine. I have my own pension with the platform.

    Boutique firms tend to be more expensive for smaller investors as they focus on higher net worth.

    Personally, I am not a fan of DFMs as it adds a layer of charges that is unnecessary. However, boutique firms like to use them as they pass all the investment decisions on to the DFM. Boutique firms tend to be more suited to those that use the adviser for all aspects of their spending habits both now and future. Usually, there is a lot of software available for forward planning etc.

    As a DFM is involved, I do not believe for one minute that the total annual charges are 1.24%. I now suspect you have only been given one part of the annual costs. Perhaps the 1.24% is just the cost of the DFM.
    I am an Independent Financial Adviser (IFA). 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 an Independent Financial Adviser local to you.
    • rjw4
    • By rjw4 20th Jun 17, 6:49 PM
    • 316 Posts
    • 192 Thanks
    rjw4
    St James' Place sales rep?
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