Transferring 4 old pensions inot a SIPP

sortingoutamess

Hi - Does anyone have any experience of complaining against or claiming back high transfer penalties on old pension policies?

I am trying to consolidate 4 old pension policies into a SIPP but have come up against high transfer penalties on two of the four policies.

Thanks very much.

vbm

I depends on why the penalties are there.

If it is an MVA then you have no chance. The only way you are likely to have any joy is if the contract has unfair terms, that were unclear or misleading in the product documentation.

This is pretty unlikely though.

dunstonh

Hi - Does anyone have any experience of complaining against or claiming back high transfer penalties on old pension policies?

These charges are contract events and there has been little or no evidence of any success as they the FOS wont rule against them and no-one has risked going to court as the chances of success are slim.

Some old plans give the impression they have high penalties but they actually havent. Particulary old with profits plans with a basic sum assured or where there was a front loading of bonuses (so a larger penalty would be expected).

It shouldnt be difficult to work out and one assumes you have done the analysis seeing as you want to transfer them.

sortingoutamess

HI - It is not in a With-Profits fund and there are no Market Value Adjusters (if that's what an MVA is?). Does any of the mis-selling debacle come into this?

sortingoutamess

dunstonh wrote: »

These charges are contract events and there has been little or no evidence of any success as they the FOS wont rule against them and no-one has risked going to court as the chances of success are slim.

Some old plans give the impression they have high penalties but they actually havent. Particulary old with profits plans with a basic sum assured or where there was a front loading of bonuses (so a larger penalty would be expected).

It shouldnt be difficult to work out and one assumes you have done the analysis seeing as you want to transfer them.

The charges were quoted to me in hard figures amounting to thousands of pounds. I have two other policies where the charges are low and none, so I'm still researching a SIPP provider for those two. Do you or anyone have any experience in dealing with Hargreaves Landsown or other similar on-line SIPPs providers? I'm just trying to get an idea of whether they are efficient or those frustrating offshore based call centre type operations at first. Thanks.

dunstonh

Does any of the mis-selling debacle come into this?

No. The providers are clean on this point.

The charges were quoted to me in hard figures amounting to thousands of pounds.

Not unusual. I have seen charges in the tens of thousands before.

Do you or anyone have any experience in dealing with Hargreaves Landsown or other similar on-line SIPPs providers?

I have no personal experience of HL and wouldnt have any need to as a) their product is direct offer and not advice based and b) its not the best for advice based. Its ok if you want to DIY but its not the cheapest option.

jamesd

Hargreaves Lansdown uses UK customer service based in Bristol. It's fast, efficient and helpful. So are their web services for account and investment management.

BeatTheSystem

sortingoutamess wrote: »

Hi - Does anyone have any experience of complaining against or claiming back high transfer penalties on old pension policies?

I am trying to consolidate 4 old pension policies into a SIPP but have come up against high transfer penalties on two of the four policies.

Thanks very much.

I transfered 3 personal pension funds which I considered to be poor performing zombie funds.

One if which was a Sun life managed fund which was worth 12K. The transfer value was only 10K so they ripped me by 2K, they tried to pursude me to stay but I told them to get stuffed.

Since the transfer the 10K has grown to 13K, (6 months) so I am pleased I did it. The Sun life fund had been performing poorly for some time.

I did this with Hargreaves Lansdown. If you are prepared to read their website and literature in detail you can learn a lot. They have done the due dilligence on 150 funds and I have to say the ones I have chosen have done extremely well.

If you are comfortable with paying lots of money to an IFA then go ahead, but if you have the time and inclination to do your own research then you wont be disapointed.

Good luck

dunstonh

If you are comfortable with paying lots of money to an IFA then go ahead, but if you have the time and inclination to do your own research then you wont be disapointed.

Interesting you say that because when you look at the HL SIPP, its more expensive than many of the plans that an IFA can put together. HL take full commission on the annual basis. They only discount the initial. However, a fee based IFA could easily beat HL or a reasonable sized fund.

I did this with Hargreaves Lansdown. If you are prepared to read their website and literature in detail you can learn a lot. They have done the due dilligence on 150 funds and I have to say the ones I have chosen have done extremely well.

You do realise that HL are paid by fund houses to market their funds. You shouldnt rely on the marketing of product providers.

BeatTheSystem

dunstonh wrote: »

Interesting you say that because when you look at the HL SIPP, its more expensive than many of the plans that an IFA can put together. HL take full commission on the annual basis. They only discount the initial. However, a fee based IFA could easily beat HL or a reasonable sized fund.

I have a SIPP which a manage myself and a SASS. I chose the SIPP due to its simplcity. The SASS is managed by an IFA and has done well, but the SIPP has done far better. Whilst I get good returns I wont move. I am sure there are slightly cheaper alternatives, but not by much.

Would you care to list better providers than HL?

The SASS investments are under transact - the IFAs vehicle of choice and that has some pretty steep charges just to get your money into it. Transact is a nice little earner for IFA's I am sure.

Lets face it, HL is a frigtening prospect for IFA's (i.e. yourself) as and quoting their website:

In effect, we want to help you become your own financial adviser.

By industry standards and definately by historical standards HL is low cost.

However whilst the vast majority of people remain ignorant of the simplicty of long term investing I am sure middle men like you will have a ball, and so you should if you are good, but I fear that there are still too many IFA's that are simply out there to fleece joe public with poor advice.

dunstonh wrote: »

You do realise that HL are paid by fund houses to market their funds. You shouldnt rely on the marketing of product providers.

I am sure they have suppliers banging on their doors to promote their products but I am also sure that it is in their interests to be impartial on the promotion of their wealth 150 funds.

Cheers

BTS

dunstonh

Would you care to list better providers than HL?

As HL take full commission with no rebate on trail it would be any pension provider that allows rebating.

The SASS investments are under transact - the IFAs vehicle of choice and that has some pretty steep charges just to get your money into it. Transact is a nice little earner for IFA's I am sure.

The IFA is almost certainly earning exactly the same as HL is because both take 0.5% trail. The difference is with Transact they tell you who is getting what. With HL you pay the retail charge and out of that HL get paid.

Personally, i am not a big fan of Transact. I find the other platforms offer better value for money and my own software doesnt require the duplication that Transact has. However, different firms have different business models and different software and different objectives.

HL have their place. However, the assumption that they are cheaper than an IFA can do it is wrong.

Lets face it, HL is a frigtening prospect for IFA's (i.e. yourself) as and quoting their website:

In effect, we want to help you become your own financial adviser.

HL is not a threat at all. I can be cheaper than HL on transactional fee basis or virtually the same cost or cheaper on advice basis. However, it is not comparing like for like. People that would use HL wouldnt use an IFA or vice versa. HL is catering for the DIY market. It also picks up a lot of people who could do a heck of a lot better but dont realise it.

By industry standards and definately by historical standards HL is low cost.

Not any more.

However whilst the vast majority of people remain ignorant of the simplicty of long term investing I am sure middle men like you will have a ball, and so you should if you are good, but I fear that there are still too many IFA's that are simply out there to fleece joe public with poor advice.

No profession is perfect but with under 2% of complaints at the FOS despite handling the majority of regulated transactions, things are not that bad.

I am sure they have suppliers banging on their doors to promote their products but I am also sure that it is in their interests to be impartial on the promotion of their wealth 150 funds.

They are not banging on their doors. HL are paid to promote funds as are many of the other platforms. The FSA is looking at banning this but some of the platforms are against it as they say charges will go up. Also, you have to consider that post 2012, HL's model is going to have to change as they wont be able to keep the adviser cut that they do now. So, they are going to lose 0.5% of their £14bill or whatever it is they have under management. They could lose the marketing bonus and they will have to explicitly charge for the platform which will put the price of trackers, ITS and ETFs up (although managed funds could come down or be cost neutral). This applies to most platforms though which havent already moved to unbundling the charges.