Wrap platforms

JJforever

Hi

I am new to this forum and could do with a bit of advice please.

My IFA has a wrap platform for pensions which has newly been set up and they are asking me to transfer my personal pension to this.

I've been sent the following regarding charges:-


Annual charge for wrap/pension – 0.55% (reduces to 0.4% once your investment is over £100,000)
Annual charge for investments funds – this can vary depending upon what you invest in, for the same funds as above this would be an overall charge of 0.71%.
Annual commission of 0.5%
The above charges make the overall annual management fee – 1.76%
We also charge an initial set up fee of 1% for dealing with the transfer of the funds and the setting up of the new pension.



Now in my current pension I have about 4 funds and the amc goes from 1.05 - 1.2.



Do you think the charges on the wrap pension are too high? They say that they will be able to help with advice and funds etc but will it be worth it for these kind of charges.


Would appreciate any thoughts please.

feesarefare

The wrap charges are not to bad, not the cheapest but not silly either.

What you really need to ask is what you are going to get for the 1% initial and 0.5% ongoing trail commission that your IFA is adding on.
They really should be able to demonstrate a real benefit to you in moving your pension.

dunstonh

Do you think the charges on the wrap pension are too high?

No. However, wraps tend to be more expensive than fund supermarkets. So, that 1.76% could be 1.5% on a fund supermarket.

They say that they will be able to help with advice and funds etc but will it be worth it for these kind of charges.

Its not so much the initial advice as once that is done, its done. Its what they are going to do ongoing that matters. What services have they agreed going forward?

JJforever

dunstonh wrote: »

No. However, wraps tend to be more expensive than fund supermarkets. So, that 1.76% could be 1.5% on a fund supermarket.



Its not so much the initial advice as once that is done, its done. Its what they are going to do ongoing that matters. What services have they agreed going forward?

At the moment they are trying to persuade me to switch but I am assuming that they are going to offer more tailored advice regarding my pension investments. In which case would it be worth it for that? I am fine at the moment picking my own investment funds but I don't know a lot about other types of investments.

Apart from questioning them on what specific ongoing advice they are going to give what other questions should I ask?

Thanks for your help on this

sandsy

Ask them if you can turn off the advice charge if you decide that you don't need ongoing advice at some point in the future.

Cautious_Investor_3

Hi

Which Wrap platform is it?

I'd agree that you should ask whether you can turn off the 0.5% if you become disatisifed with their service.

I wouldn't say 1% initial plus 0.5% ongoing is expensive but I would indeed want to see what you will get for the 0.5%. For example how many review meetings a year, will they rebalance the portfolio, can you get online access etc etc.

I'd also want to know who is picking the funds, what research capability do they have etc? I'm fed up of IFAs who think they are fund pickers, and know which is, for example, the best Asia fund or North American fund, there is no single fund manager who knows everything about every marjet so why do IFAs think they do?

Rant over.

The Cautious Investor

feesarefare

Cautious_Investor wrote: »

Hi

I'm fed up of IFAs who think they are fund pickers, and know which is, for example, the best Asia fund or North American fund, there is no single fund manager who knows everything about every marjet so why do IFAs think they do?

Rant over.

The Cautious Investor

Not a rant, just a statement of fact and a fair question!

Most IFAs are currently working hard in moving their clients to trail commission before 2013, and selling it on the back of their "fund picking" skill's, for which most have no evidence of being any good at or specific qualifications.

jamesd

JJforever, ask them what they would charge to provide the advice on fund selection with investments held as they are now, in a cheaper place. You have the 1% initial cost plus 0.5% ongoing commission plus the difference of fund cost that you can use to pay for services without being worse off than what they are pitching now.

An alternative is something like Alliance Trust Savings that rebates most or all of the initial commission and all annual commission, but has dealing charges for fund purchases, so it's not cheaper for ongoing contributions. That can make pairing a place like that with a low dealing cost place like HL cheaper, with periodic transfers from one to the other.

JJforever

Cautious_Investor wrote: »

Hi

Which Wrap platform is it?

The Cautious Investor

Ascentric is a trading division of Investment Funds Direct Limited, part of the Royal London Group

I also agree with the fact that some IFAs pretend they know everything about the funds they recommend when they probably know less than you do. That's why I am pretty wary about IFA's offering advice. If they offer advice on investments that I'm not familiar with and I go with them and it goes wrong it's no good me blaming them as I feel you have to take responsibility for your own decisions.

Thanks to everyone who replied, really appreciate it.

dunstonh

I am pretty wary about IFA's offering advice. If they offer advice on investments that I'm not familiar with and I go with them and it goes wrong it's no good me blaming them as I feel you have to take responsibility for your own decisions.

The whole point of using an IFA is that they take responsibility and you can blame them. Not if the portfolio is in line with your risk profile but if they use an unsuitable investment you do get consumer protection.

piglet2

tehy now offer £1.50 monthly dealing charge - SO now SO much cheaper than HL