moving a stakeholder pension

wellsie82

ive got £5k pension with virgin money. virgin have 2 funds to invest in and im after a wider choice of funds so im looking into moving to legal and general who have 10+ funds to choose from and their charges seem lower

when i rang legal and general today they said that in order to transfer my pension in they would have to get an advisor of theirs to talk to and id be charged for this

i told them i dont need advising as i know what im doing and dont want to be charged for something i dont even want

when i transferred an previous employment pension to virgin they didnt charge me so is this just with L&G or has anyone else come across it before?

dunstonh

Virgin dont transact through advisers and have set up a direct distribution arm. L&G do transact through advisers and although they have a small salesforce, they do not transact direct.

Companies cannot accept applications from distribution channels that they have not received authorisation for.

wellsie82

dunstonh wrote:

Virgin dont transact through advisers and have set up a direct distribution arm. L&G do transact through advisers and although they have a small salesforce, they do not transact direct.

Companies cannot accept applications from distribution channels that they have not received authorisation for.

not sure if understand that 100% mate, does that mean they are unable to offer the product/investment to me unless they've been seen to be going through it all with me first, because its their own product?

also, in your experience, how much would you think they'd be looking to charge me for this advice?

Milarky

Dunstonh,

What about Cavendish (or similar brokerage service)?

http://www.cavendishonline.co.uk/COL/Pensions.htm

What's an IFA's view on this as the OP just wants to move his money from Virgin [Managed and FTSE tracker funds only I believe] to somewhere with meaningful fund choice. Is that really something that requires 'advice'?

I don't know, which is why I am asking, but does the use of broker still allow the customer to perform all the same (non-advised) functions himself - like funds switching?

Wellsie 82,

There's no reason for not opening a new plan with (say) L&G and just leaving your Virgin plan fallow without adding to it - at least in the short term. In the longer you will probably want to bring such plans together - so exactly the same question arises.

Stakeholder pensions: If they (the gov't/industry/regulator) can't make it staightfoward to move these plans between providers there's not much hope for the future of semi-compulsory pensions for all (or most) a la Turner is there?

wellsie82

L&G's website describes how its oh so easy to move funds free of charge at any given time so whos to say that once advice is given the investor can then do their own thing once L&G's back is turned?

You can choose to invest your contributions into one or more funds according to your attitude to investment risk. You can switch your investment from one fund to another, whenever you choose, free of charge.

The lad I spoke to there when I queired it said getting an advisor to call me is a standard procedure and this is how they word it on their site...

http://www.legalandgeneral.com/pensions/stakeholder-for-individuals/the-charges.html

If you are transferring the value of your pension plan into a new Legal & General Stakeholder Pension Plan, an extra charge may apply, as professional advice is provided.

So it says "may" apply but they didn't have a clue who much of a cost it would be earlier on, very strange indeed.

Another advantage of moving it to them is Virgin charge 1% per year and L&G charge 0.9% for a balance under £25k

I think I'll set it up, get my online access/valuation sorted and depending on the charge/advice thing if worst comes to the worst I can always close my L&G pension and move it to Virgin so everything's together

In my opinion you get what you pay for, if dont want something you dont pay for it. If it's a set price thats one thing, but I won't be happy if its a percentage of the transfer in value

Thanks for your help guys :T

dunstonh

not sure if understand that 100% mate, does that mean they are unable to offer the product/investment to me unless they've been seen to be going through it all with me first, because its their own product?

Not quite. They accept applications via those that are FSA authorised. That means their own salesforce or IFAs. They are not authorised at this time to accept postal applications from the public.

What about Cavendish (or similar brokerage service)?

Cavendish are effectively IFAs offering execution only basis. Any IFA can do that if they want. Cavendish have it as a main part of their business though.

What's an IFA's view on this as the OP just wants to move his money from Virgin [Managed and FTSE tracker funds only I believe] to somewhere with meaningful fund choice. Is that really something that requires 'advice'?

Depends on the OPs experience.

I don't know, which is why I am asking, but does the use of broker still allow the customer to perform all the same (non-advised) functions himself - like funds switching?

The key thing is that it is the same product. L&G just dont issue it direct to public.

Another advantage of moving it to them is Virgin charge 1% per year and L&G charge 0.9% for a balance under £25k

A discount IFA would get it cheaper than that. That 0.9% is the full retail price assuming commission paid in full.

dunstonh

To clarify that as it wasnt really clear.

An insurance company has to decide how it is going to distribute its products and get FSA authorisation for doing it that way.

So that can be direct distribution to customers (like Virgin) - no advice given classed as a direct offer.
Or through their own salesforce (like the banks)
Or through FSA authorised independents (like IFAs) -advice doesnt need to be given here but the responsibility for the sale of the product is in the hands of the IFA. Cavendish is a good example of this where no advice is given and they discount because of that.

Some companies will have one distribution channel, two or all three.

edit: A bit of checking shows that L&G do have direct offer but its the full retail product at full cost so there seems little point buying it that way.

edit2: if you start asking for advice on the telephone on a product that is meant to be direct offer only, they will refer you to an adviser.

edit3: some providers require an adviser to be involved with a pension transfer due to increased risk of getting it wrong.

wellsie82

morning

thanks for the additional replies, that's cleared it up no end

will let you know how it goes

cheers

EdInvestor

Always go through an execution only discount broker/IFA unless you actually want advice.The discount firm will rebate the charges.If you go direct you pay the full charges even though you get no advice.Worst of all worlds.

wellsie82

EdInvestor wrote:

Always go through an execution only discount broker/IFA unless you actually want advice.The discount firm will rebate the charges.If you go direct you pay the full charges even though you get no advice.Worst of all worlds.

how do you mean by a discount broker and wouldn't an IFA charge at all?

EdInvestor

Have a look at a couple of discount broker sites

https://www.cavendishonline.co.uk
https://www.hargreaveslansdown.co.uk

There are plenty of others.

They rebate the charges back to you.