Pension advice.

robowen

I had a IFA bloke round the house last week to sort out my pension stuff. At present I've got 3 pensions. 1 is ongoing from work and the other 2 are from previous employers.
I wanted to combine the 3 together and get a pension that is a bit more lively than the dire one from work. Work wont co-operate and pay their contributions into any new pension I set up.
My plan is to continue letting work pay into the company pension, set up a new pension with the combined funds from the other two and I'll put my own contributions into it rather than into the work one. The new plan is better than all the other 3....so the IFA man says.
I think I prefer to combine them and have less paperwork than I receive at present, plus the new plan does perform better than the others. And I can always continue paying to it and take it with me.
I was given the choice of paying his fees by the hour (£80/H) payable by me, or 5% of the transfer value payable by the new company pension scheme(i.e taken out of the transfer value), This is around £1800. If I choose the second option he'll split the fees, he'll get 900 and the rest go back into the pot.
Iknow he has to make a living , but if I chose the hourly rate I'm not sure what the final bill would be. He's clocked up 4 hours research at home and last week spent 5 hours at mine going through everything. Next he goes away and finishes off his data building (listing all our financial affairs etc ), then he'll come back and finish off signing the new papers. He aint quick :doh: I do trust him, we've used him for years, but this is the first time the fees have hit home.
Previously we were told that he takes a fee from a pool fund of the companies he refers us to, and not from us.
This time we're asked to stump up the fees from our pot.

What does everyone else think of this advice ?

rob

EdInvestor

Hi Robowen

It is pretty unlikely the IFA scheme will do better than the works pension you've already got. Is it a final salary scheme or money purchase? How much is being paid in by you and by them?Where is the money invested?

Regarding the other two old pensions, what is their total value?What type of pensions are they - final salary, money purchase? Or are they with outside life insurance companies?Which ones? Which funds are they invested in?

Finally, what scheme is the IFA suggesting?

dunstonh

The fees seem very reasonable.

You have to remember that there is a lifetime financial liability for the advisor and he has to hold on to copies of all documents forever.

He is taking £900 for 9 hours work so far. Chasing the providers and completing after sale paperwork would take another couple of hours. So the fees are below average.

Previously we were told that he takes a fee from a pool fund of the companies he refers us to, and not from us.
This time we're asked to stump up the fees from our pot.

If it is being done on fee basis but paid by provider, this usually results in cheaper annual management charges. With terms of 20 years or more to retirement, this can make the pension much cheaper than a stakeholder. By paying fees out of the product rather than by cheque, you avoid having to pay VAT.

In effect, it is little different to commission in the way its being paid. It's just showing you the explicit amounts and being more upfront about them. He should be rewarded for that.

Remember that you were still paying for it before in increased charges. However, they would be percentage based. The provider would increase the annual managment charge to pay the advisor. After about 8-10 years, the amount paid to the advisor would be covered and the provider would keep the extra charge for themselves.

My plan is to continue letting work pay into the company pension, set up a new pension with the combined funds from the other two and I'll put my own contributions into it rather than into the work one. The new plan is better than all the other 3....so the IFA man says.

All seems fair enough so far.

it is pretty unlikely the IFA scheme will do better than the works pension you've already got.

What grounds do you have for saying that? We know nothing about the works scheme. It could be a group stakeholder, money purchase scheme with limited fund options or a final salary scheme. You cannot jump to the assumption that it will not beat the works scheme without knowing what type of scheme it is. It could easily beat many work schemes.

Regarding the other two old pensions, what is their total value?What type of pensions are they - final salary, money purchase? Or are they with outside life insurance companies?Which ones? Which funds are they invested in?

Does it matter? It has nothing to do with you as you have no access to any of the other information to make any judgement on them.

whiteflag_3

EdInvestor wrote:

Hi Robowen

It is pretty unlikely the IFA scheme will do better than the works pension you've already got. QUOTE]

How can you say this without knowing all the facts?

If you are certain, can you also tell me if Wembley will be finished in time for the Bon Jovi concert in June?

Ps your decision to walk away from your thread on IFAs/ with profits seriously undermines any credibility you might have had. You cant just stir up a hornets nest and then walk away when the going gets tough

ReportInvestor

The going didn't get tough. Some people decided to repeat ad infinitum that they didn't think Ed's summary of the Telegraph article on WP advice was a true representation of the article.

I thought it was.

The argument, if there was one, had become exhausted and it had become a case of restating opinions.

whiteflag_3

ReportInvestor wrote:

The going didn't get tough. Some people decided to repeat ad infinitum that they didn't think Ed's summary of the Telegraph article on WP advice was a true representation of the article.

I thought it was.

The argument, if there was one, had become exhausted and it had become a case of restating opinions.

How do you know what Ed thinks. She was viewing the posts in the last 15 minutes ?

Ed made a comment re IFas/ tied agent status, which as far as im concerned wasnt going round in circles, yet she refuses to elaborate/ answer what was a fairly simple question. Come ladies(lady ?) play the game.

ReportInvestor

I would like to be able to comment in future, like anyone else here, without unnecessary inuendo.

EdInvestor

QUOTE=EdInvestor]Hi Robowen

It is pretty unlikely the IFA scheme will do better than the works pension you've already got. QUOTE]


Normally, a company can negotiate lower charges on a "bulk buy" basis for pensions than are obtainable by an individual.

If Robowen wishes to post some details of his other pensions it may be worth seeing if he could simply switch the money onto a better deal and into a better fund at the company he's already with rather than paying fees for a transfer.

But in some cases a transfer can be justified.

I wonder why an IFA would suggest you shouldn't look into this aspect?You may draw your own conclusions as to what might be the motivation.

I couldn't possibly comment

whiteflag_3

ReportInvestor wrote:

I would like to be able to comment in future, like anyone else here, without unnecessary inuendo.

Sorry whats happened to that famous sense of humour Ed uses?

whiteflag_3

EdInvestor wrote:

QUOTE=EdInvestor]Hi Robowen


I wonder why an IFA would suggest you shouldn't look into this aspect?You may draw your own conclusions as to what might be the motivation.

I couldn't possibly comment

Why whats happened, you usually do!

whiteflag_3

EdInvestor wrote:

Hi Robowen

It is pretty unlikely the IFA scheme will do better than the works pension you've already got. Is it a final salary scheme or money purchase?

Ok Ed, fun over your views please.

Lets assume that the posters company scheme is a Group PP ( the most popular type of scheme) and most likely is a stakeholder or equivalent with 1% amc and limited fund choice.

If the IFA does a good job and through commission give up gets a PP contract with say 0.85% amc, wide fund choice, internet access (reduced Paperwork as the poster wants), no tranfer penalties in the future for maximum flexibility and a large fund discount , why would the poster be better off with the company GPP?