Moved pension - big fees

whiteflag_3

dunstonh wrote: »

Exactly, the commission is funded out the product charges. Factory gate priced contracts which equalise the initial commission and initial charge still use the commission system to pay the remuneration. A 3% commission would be a 3% charge and that would show on the personal illustration under the charges section.

Winterthur quotes dont show the adviser renumeration in the charges section .

The attached plan summary seems to inicate that the commission/adviser renumeration isnt funded out of the product charges

http://www.winterthur-life.co.uk/NR/rdonlyres/D0F0F58C-DCF0-4A3D-B7EF-17A93218E957/0/ONE0002_1108_TheOnefromWinterthurProductSummary.pdf

I leave the readers to make their own minds up

jem16

whiteflag wrote: »

Winterthur quotes dont show the adviser renumeration in the charges section .

The attached plan summary seems to inicate that the commission/adviser renumeration isnt funded out of the product charges

http://www.winterthur-life.co.uk/NR/rdonlyres/D0F0F58C-DCF0-4A3D-B7EF-17A93218E957/0/ONE0002_1108_TheOnefromWinterthurProductSummary.pdf

I leave the readers to make their own minds up

What I'd like to see is the Winterthur Product Charges and Terms & Conditions that it makes reference to but doesn't appear to be available on the website.

EdInvestor

Whiteflag

Do you think the OP's parents wrote the IFA a cheque for the commission?Or do you think the commission was paid to the advisor out of their existing fund by the lifeco after the transfer?

MikeJones_2

I'm neutral in respect of what has already been said on this post - but I would make the following technical observation:

I don't believe HMRC would be too happy if a client had signed a cheque for £100k to be paid into a registered pension scheme (or in this case transferred from one scheme to another) and the scheme recorded an input of only £97k, with say £3k having never gone into the pension scheme in the first place (instead being taken as fees).

That is potentially open to abuse.

Or have I missed the point?

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

EdInvestor

This was a transfer not a new contribution.

dunstonh

I just got a winterthur illustration and there is a section on there that says: (excuse formatting which doesnt copy and past across and the figure i used for remuneration was £4500 on £100k - that figure is selectable)

---

What Charges will be deducted?

The following charges have been taken into account in the projected values on this illustration:

Adviser Remuneration Charges
· Initial FAR Charge 4.5% of the premium payable on 22nd July 2009.

Fund management charges, with rebates on Winterthur Funds if applicable, will be payable. Details are shown under the section headings 'Investment Allocation'.
The figures shown elsewhere in this illustration, showing the effect of charges and deductions should not be viewed in isolation, but read in conjunction with the above figures.

Unless stated otherwise any charges apply across the contract as a whole and not each individual element.

The amount(s) will be paid by deductions from your fund, by cancelling units. If there is an insufficient value of units available to pay the charges when due, the deduction from your fund and Flexible Adviser Remuneration will be deferred until after sufficient contributions have been received.

Additional charges will apply if you subsequently choose the self-invested option. Please refer to the product literature for further information.

---

At the end of the end of the illustration it says:

---

How Much Will The Advice Cost?

For providing investment services on this policy Winterthur Life will pay remuneration to your professional adviser, XXXXXXXXXXXXXXXX, as follows:
4.5% of your contribution(s) in the first year of your policy.
This will result in a payment of £4,500.00 in the first year.
The amount(s) will be paid by deductions from your fund, by cancelling units. If there is an insufficient value of units available to pay the remuneration when due, the deduction from your fund and payment to the adviser will be deferred until after sufficient contributions have been received.

An Investment Deals Manager may also charge for their additional services.

---

Just for reference, despite the high figure of £4500, the reduction in yield was to 6.1% making it cheaper than stakeholder. Had the fund been over £250k or £500k or £1 million the charges would be even lower due to fund based discounts. We dont know the specifics on this pension case still and it looks like we won't now.

Winterthur quotes dont show the adviser renumeration in the charges section .

So, what is the section on the illustration that says "What charges will be deducted?" and what is the bit under the section that says "Adviser remuneration charges" ?