independant financial advisor- pensions

masrock

My company want to switch our pension from a scottish widows which is underperforming to a norwich union which they say has lower fees blah blah blah.

Despite the best efforts of our trustees I left feeling confused like I've sat through a sermon in swahili.


I'd like to consult someone who will look at my situation, and make the best reccomendation so the Government and the banking world get less of my money and I get the best return from my and my companies contributions.

But it was suggested that such advice can cost up to £500, or £100 per hour. It's not brain surgery, it's just understanding a specialised language. Can it really be so expensive?!

I feel a bit under siege with everyone wanting to tae a bite out of my possible standard of living when I retire.

Is it worth spending the money on independant advice, or should i be a sheep and follow the flock and possibly get fleeced with everyone else? I'm 37 and have another final salary pension (with 9 years membership) that i no longer contribute to when i moved jobs and my current scheme that I've been in for 5 years

Masrock

dunstonh

But it was suggested that such advice can cost up to £500, or £100 per hour. It's not brain surgery, it's just understanding a specialised language. Can it really be so expensive?!

£100-£125 per hour plus VAT is the average. A transaction solely dealing with this shouldnt cost more than a fixed fee of £175 plus VAT if you want the full written report. If you just want a quick appraisal, it should be around £125 plus VAT.

Is it worth spending the money on independant advice, or should i be a sheep and follow the flock and possibly get fleeced with everyone else? I'm 37 and have another final salary pension (with 9 years membership) that i no longer contribute to when i moved jobs and my current scheme that I've been in for 5 years

Do you know how you want the pension invested and how much should go into each of the sectors/funds? Are you willing to spend the time finding out to make your own mind up? Following the herd is usually a bad idea as this usually means ending up with a single fund in a bog standard balanced managed/passive managed fund.

My company want to switch our pension from a scottish widows which is underperforming to a norwich union which they say has lower fees blah blah blah.

Which is a bit of a red herring as the difference in charges is now minimal nowadays and with NUs COMP and GPPP administration quite awful, the money saved may only be 0.1% p.a. but the time cost would equate to being much higher. Scot Widows have an excellent fund range available too so fund performance isnt a correct justification either. If the full retail fund range of both pension providers was available, then Scot Widows would beat Norwich Union on quality. Although there is little you can probably do about the switch now.

masrock

Thanks Dunstonh for the long reply.

I'm a scientist and use to dealing in absolutes, the pensions advisor used what were to me 'woolly' terms and there were lots of 'buzz words' that I didn't know the definitions of.

Now i'm a reasonably bright guy but I'm uncomfortable here 'cause I'm way out of my element, so I'd be prepared to get into the nitty gritty if someone had the time to explain how each one related to my circumstance. I can make choice s but the whole system seems unneccesarily complex. It's rather frustrating.

Masrock

blackanchorage

I assume that you don't have much choice over the scheme your company invests in (if that isn't the case, then ignore the rest of this post).

It sounds like you're considering spending a lot of money on reviewing your position in your company pension scheme, when you're almost certainly going to want to stay in it, because the company is also contributing.

I'd recommend doing a lot of reading - perhaps you could start at http://www.fool.co.uk/school/2005/sch2005.htm. It will help you decide whether you need an IFA, and if you do, to be able to review their recommendations.

Regards, Roger

EdInvestor

Two aspects with a Pension:

1.The cost of the tax wrapper bit ( ie the insurance company providing it and their charges. You have basically no control over this, the employer decides.)

2.The investment bit: (ie the funds within it and which ones you should choose.)This is where you should make the effort.

Firstly find out which funds are on offer.
Then check their rating in their separate categories on this site:

https://www.citywire.co.uk/Funds/Home.aspx

Then list them according to their ratings and see what you've got.

At that point you could come back here and tell us the results and we might be able to comment.

blackanchorage

That would seem very simple, to rank your choices using that table. But...
- it's bid/bid - so won't penalize funds with large spreads
- I don't think management charges are taken into account
- past performance should not be taken as an indication or guarantee of future performance.

The fact that you have another, final salary, pension should also influence your choice - but I'm not sure how...

Regards, Roger