Whats the right thing to do when RePensioning

MoneyMad

I am asking because it is NOT a IFA's job to tell you which one you should pick!, they are there to advise on what the options are and give you the details so that YOU can make your own choices, they give you all the facts and thats it. What I need is a bit more than this, but no one is going to stick there necks out and give you advice about which one you should take, are they? So I am hoping by discussing this topic, i might be able to get a reasonable idea about what i should do. I am not expecting free advice just an idea of what might be out there that I might not have considered. So things I am considering are a Managed Fund or SIPPs and Protected Rights or a Discretionary Fund, i.e. one where your investment broker can decide which companies to invest in... SO i do have a few options all have similar charges so unless there is anything else i need to consider i will pick one of these, thats why I am asking :-)

feesarefare

MoneyMad wrote: »

I am asking because it is NOT a IFA's job to tell you which one you should pick!, they are there to advise on what the options are and give you the details so that YOU can make your own choices, they give you all the facts and thats it /QUOTE]

Hopefully you post is a wind up, however it isnt-

Im sorry but you are quite wrong.

The job an IFA is to recommend the most suitable product from the whole of market having fully assessed your situation and circumstances including affordability and attitude to risk.

If you are seriously saying there are people out there calling themselves IFAs, that are basically coming up with a number of option and saying "you choose" then our industry in plumbing new depths.

MoneyMad

Wow! you must be one in a million!, someone who is willing to put there neck on the line and recommend which one is best! On a serious note, I would like to wait and see how many other people post a reply to this thread to see if they agree with you or me, i.e. their IFA has recommended which plan/fund/policy they should pick.

Not sure there is much more to say other than look forward to reading some more replies....

Oh! one last thing, I will have a word with my IFA and ask which one I should go for, hopefully if he has done his homework he should be able to pick the right one that will perform the best!

feesarefare

MoneyMad wrote: »

Wow! you must be one in a million!, someone who is willing to put there neck on the line and recommend which one is best!

dont think so - recommend the one that is most suitable for your circumstances .

On a serious note, I would like to wait and see how many other people post a reply to this thread to see if they agree with you or me, i.e. their IFA has recommended which plan/fund/policy they should pick.

LOL!:D

Oh! one last thing, I will have a word with my IFA and ask which one I should go for, hopefully if he has done his homework

Heres hoping

You could give him a slap as well

he should be able to pick the right one that will perform the best!

Now thats the only thing he wont be able to do!!

Although he could recommend the best one for you to pick.

jem16

MoneyMad wrote: »

their IFA has recommended which plan/fund/policy they should pick.

Mine did exactly that.

That's the job of an IFA - to recommend the most suitable product for you.

dunstonh

I am asking because it is NOT a IFA's job to tell you which one you should pick!, they are there to advise on what the options are and give you the details so that YOU can make your own choices, they give you all the facts and thats it.

Tied agents typically give you a choice and allow you to pick. IFAs are not there to give you the choice but to do the picking for you. Are you perhaps thinking of FAs and not IFAs?

sandsy

MoneyMad wrote: »

Just so that I am clear about what you are saying, the figures i see on an illustration e.g. amount to invest 70K, effect of charges 30K and 120K as the figure on maturity after charges. All of these are not reflecting the possible Return or Charges! i know it might be an illustration but that is what I am lead to believe my pension might be worth (a bit more or a bit less), but ultimately i see these figures and think 30K in charges and 120K as what i might get when i retire, so if i do the math i make it about 20% which i admit is over a 15year term which works out on ave. as 1.3% per year which does not look too bad.... its just those final figures which makes me cringe. But I guess what I should be doing is looking at what I might get compared to leaving it in a poor performing pension plan, so the higher charges are reflective of the possible better returns.

If there were no charges, your return would be around £150k which, on an investment of £70k, implies a gross return of 5.2%pa.
Your actual illustrated return is £120k which implies a return of 3.7%pa, so the reduction in yield is 1.5%pa - not that far out from your back of the envelope calculation

Now you read this as losing £30k out of your possible £150k, ie. about 20% of the funds are going in charges. But other people are telling you that's not the way to look at it and it's really returns that are important and therefore you should look at the 1.5% because 1.5% isn't really that big a number in the scale of things.

However, looking at the 1.5% in isolation isn't ideal either - because it's a number in isolation, it's not being compared to anything else. In fact, what's happening here is that as a result of the 1.5% RIY, you're only getting a return of 3.7% instead of 5.2% over the 15 year period, ie. 29% (1.5%/5.2%) of the return you could have received over 15 years is disappearing in charges.

RIY in isolation is not a useful tool. It needs to be looked at relative to the gross return. The interpretation of a reduction in yield of 1.5% if the gross return is 12% should be different if the gross return is only 5%. And whilst charges on investment products have come down over the years, they haven't come down as fast as typical investment returns have come down. So consumers today would typically be paying a larger proportion of their investment returns in charges than when investment returns were higher a few years ago.

MoneyMad

He is definitely an IFA, i will ask which one he thinks i should go for, i just hope he does not pick the one with the highest charges (i.e. those quoted for the advice). He has done all the Q&A stuff that helps him decide on my attitude to risk etc... and what i need from my pension. so it will be interesting to hear what he says.

MoneyMad

I was confused the first time i read your post, but on a second parse, i understood most of what was written, :T

Sounds like i wont get a better deal if thats the way it is at the moment.... I hope in 15 years time i will be thankful to my iFA for recommending one of the 3 he gave and be able to retire with a comfortable pension. Then again he might come back in five years time and propose i do something different..!

Thanks for all your comments.

jem16

MoneyMad wrote: »

Then again he might come back in five years time and propose i do something different..!

Thanks for all your comments.

I would hope that he was keeping an eye on your pension yearly. Are you employing him on a transactional basis or servicing basis?