Opinions sought on Skandia CRA transfer

feesarefare

wendb69 wrote: »

Hi there, I work for an IFA in the admin department. I have to say a lot of our clients pensions are transferring in to Skandia (Collective Retirement Account)QUOTE]

Wendy would you happen to know why your advisers are recommending Skandia over other providers? Can I ask what basis of remuneration they are working on?

Gatser

feesarefare wrote: »

wendb69 wrote: »

Hi there, I work for an IFA in the admin department. I have to say a lot of our clients pensions are transferring in to Skandia (Collective Retirement Account)QUOTE]

Wendy would you happen to know why your advisers are recommending Skandia over other providers? Can I ask what basis of remuneration they are working on?

I am still favouring the ALLIANCE TRUST Select SIPP over the SKANDIA SIPP. (Decision not final yet though!)
I believe:
* You have to use (and pay!) an IFA for the SKANDIA option, so no surprise that IFA's are keen to recommend

I will look into comparative charges and report back.... admin fees, set up costs etc....

lamb1102

Spoke to IFA today....


His 0.5% ongoing includes servicing and rebalancing with no switch charges, so the number of funds will not incur added cost.
His commission is taken from fund based trail with excess rebated.

The RIY is 1.6%

Im inclined to go with this as opposed to the SIPP as I believe this will be actively managed whereas any SIPP I set up may be a bit cheaper but I dont trust myself to manage it as well as an experienced IFA.
He also spoke of rebalancing more than once a year with no extra cost as he believes that could improve returns and therefore his remuneration.

feesarefare

lamb1102 wrote: »

Spoke to IFA today....

His 0.5% ongoing includes servicing and rebalancing with no switch charges, so the number of funds will not incur added cost.
His commission is taken from fund based trail with excess rebated.

Does the CRA have an auto rebalancing facility?

The RIY is 1.6%

Looks about right

Im inclined to go with this as opposed to the SIPP as I believe this will be actively managed whereas any SIPP I set up may be a bit cheaper but I dont trust myself to manage it as well as an experienced IFA.

How actively managed is it going to be? Do you think paying approx £1600 pa is good value? How experienced is the IFA , does he have any specific investment qualifications? Whats their investment philosophy ?

He also spoke of rebalancing more than once a year with no extra cost as he believes that could improve returns and therefore his remuneration

Did he explain why he believes this to be the case? While its believed rebalancing annually is beneficial, I havent seen evidence to suggest its beneficial to do it more often.
http://www.ftadviser.com/InvestmentAdviser/Investments/Products/MultiManager/News/article/20091123/935fec58-d846-11de-99a4-00144f2af8e8/IA-p24-301109-Skandia.jsp


That said if your IFA wants to go to the trouble of doing it and there's no extrat cost to you then I suppose its up to him. It would take up alot of time doing it for all their clients.

lamb1102

Not sure about the auto rebalancing.

As far as managing goes they will do this according to my risk profile and wether that changes over time, they will rebalance several times a year because as the fund dynamic changes so too does my exposure to risk.
As for the £1600 , well this sounds a lot but as far as i can see the commission is coming from the funds but if I managed my own I may not get the same amount of trail rebated, as I understand. Obviously there has to be some cost and .5% is not enormous when in effect Iam backing the IFA to beat my judgement by over that amount to make it worthwhile.
He explained quite fully what their investment policy was and it left me feeling it was a sound practise.
The IFA I spoke to was a Chartered Financial Planner.

Overall I believe this plan will put me in a position at 60yrs old(ideal retirement age) that is superior to staying in the Phoenix plan which would mean probably going to 65 to hopefully get a final bonus worth staying for .
Its possible that I could do better in an alternative set-up but after all its all a bit of a gamble.
I also have a company pension and another small pension so I feel quite fortunate really.
Thanks again everyone for your input.

feesarefare

lamb1102 wrote: »

Not sure about the auto rebalancing.

As far as managing goes they will do this according to my risk profile and wether that changes over time, they will rebalance several times a year because as the fund dynamic changes so too does my exposure to risk.
As for the £1600 , well this sounds a lot but as far as i can see the commission is coming from the funds but if I managed my own I may not get the same amount of trail rebated, as I understand. Obviously there has to be some cost and .5% is not enormous when in effect Iam backing the IFA to beat my judgement by over that amount to make it worthwhile.
He explained quite fully what their investment policy was and it left me feeling it was a sound practise.
The IFA I spoke to was a Chartered Financial Planner.

Overall I believe this plan will put me in a position at 60yrs old(ideal retirement age) that is superior to staying in the Phoenix plan which would mean probably going to 65 to hopefully get a final bonus worth staying for .
Its possible that I could do better in an alternative set-up but after all its all a bit of a gamble.
I also have a company pension and another small pension so I feel quite fortunate really.
Thanks again everyone for your input.

What you've said makes perfect sense- hopefully getting answers to the questions has helped in cementing your initial thoughts.You are not getting ripped off and if they deliver on the service and you think you are getting value for money then great. Much better to check before you leap rather than an awful lot of people who come on here asking questions once its too late.

Next step should be to stop focusing too much on the product and start working out exactly what you are going to do when you get to sixty- its a fact that you can have alot more fun then than when your ten years older!:D

lamb1102

Thanks for that feesarefare, Ive had great input from yourself and others, not just on this thread but through the search facility also.
Ive had to question myself and the IFA who spent a total of 76 minutes in 2 seperate calls on the phone purely answering questions raised through researching on this board.(yes I did count the minutes !).
Hope it pays off, roll on 2023 or sooner hopefully

dunstonh

* You have to use (and pay!) an IFA for the SKANDIA option, so no surprise that IFA's are keen to recommend

That is no different to any product out there. Skandia is explicitly charged so you agree the fee and the fee is the same whether its skandia or whoever.

Not sure about the auto rebalancing.

The skandia contract offers auto rebalancing but only to the initial allocation set up. It does not get revised as new sector allocations get updated. That requires manual input.

feesarefare

dunstonh wrote: »

The skandia contract offers auto rebalancing but only to the initial allocation set up

Yes thats what rebalancing is

It does not get revised as new sector allocations get updated. That requires manual input

Thats not rebalancing
Changing funds within a sector isnt rebalancing either

Gatser

dunstonh wrote: »

That is no different to any product out there. Skandia is explicitly charged so you agree the fee and the fee is the same whether its skandia or whoever.
.

Not sure what EXPLICITLY CHARGED means?

....but..... comparing the SKANDIA & ALLIANCE TRUST products:

* SKANDIA will incur IFA charges of between 0.5% - 4.0% but it looks like this can be paid out of rebated (trail) commission so hopefully the trail commission should cover the IFA costs

* ALLIANCE TRUST (website) indicates that I can set up a SIPP directly with them, without IFA involvement. There is no set up fee and annual admin fee is £75pa.

Obviously there are going to be other costs that should be compared:
* Set up Unsecured Pension for drawdown (AT=£200)
* Annual USP fee (AT=£50 pa)
* Online dealing (AT=£12.50)
* Transfer out (AT=£125)

Because SKANDIA insist on using an IFA there is not so much upfront visibility on their fees.