Changing/swap of pension by IFA

choppy-c

Dear all,

Wanted to see a different perspective & "If there was a place for this - It is here"

I have "Bog standard" Fprov pension reasonable split of funds most safe some bit more adventurous usual sort of thing - not huge but nonetheless a pot with usual growth anywhere from 1/2% to 10-17% some funds in good years

Have been approached by IFA - seem ok company - who are advising moving to Scandia or similar offering vastly more funds & lower charges & can opt for yearly review ie more aggressive than the funds with Fprov that have I been in for last decade or 2.
(All of which i will pay for but probably no more & possily less in some areas than Fprov)
They make a good case (!!) Any considerations i may have missed ? Good idea or not ?

Thanks as ever

dunstonh

Skandia have around 1000 funds compared to FPs dozen or so. Current new business versions of FPs pension are quite good. Although Skandia can come in cheaper using the Blackrock institutional trackers if low cost is what you are after.

The IFA should do a cost comparison showing the cost differences. That will tell you more than we can as we dont know what version of the pension you have (and its terms) and what investments the IFA is recommending. That said, Skandia Inv solutions (not Skandia life) is a very good option. Its where I have my own pension.

choppy-c

Thanks & yes comparisons have been done & certainly make look attractive to switch based on the numbers - both increased performance & reduced costs wise

I was not aware you could swap providers & wondered if anything else needed to be considered & if there is a better way of doing it.

The Ifa will receive a commission (approx 1.5%) of total value that will be taken & spread over the next 5 years so in effect out of future (& hopefully increased) income -(I dont have a problem per se with this - we all have to get paid add i believe we all should get paid - but am wondering if he is offering such a good deal.

Bigsmak

choppy-c wrote: »

Thanks & yes comparisons have been done & certainly make look attractive to switch based on the numbers - both increased performance & reduced costs wise

I was not aware you could swap providers & wondered if anything else needed to be considered & if there is a better way of doing it.

The Ifa will receive a commission (approx 1.5%) of total value that will be taken & spread over the next 5 years so in effect out of future (& hopefully increased) income -(I dont have a problem per se with this - we all have to get paid add i believe we all should get paid - but am wondering if he is offering such a good deal.

They shouldn't be trying to show you increased performance. They should be showing you the effects of the charges on your funds based on equal 'projected' growth rates, and the effects of their commission on the final pot as well.

If the numbers work out for you then switch, seeing as you have more funds to choose from as well, this can only be a good thing.

dunstonh

choppy-c wrote: »

Thanks & yes comparisons have been done & certainly make look attractive to switch based on the numbers - both increased performance & reduced costs wise

I was not aware you could swap providers & wondered if anything else needed to be considered & if there is a better way of doing it.

The Ifa will receive a commission (approx 1.5%) of total value that will be taken & spread over the next 5 years so in effect out of future (& hopefully increased) income -(I dont have a problem per se with this - we all have to get paid add i believe we all should get paid - but am wondering if he is offering such a good deal.

1.5% initial is good. On commission basis, Skandia allow up to 4.5%. So, you are getting it at discounted terms.

choppy-c

Thanks for the replies - My mistake its actually 3% initial commission !

feesarefare

choppy-c wrote: »

Thanks for the replies - My mistake its actually 3% initial commission !

Can I ask what does that equate too in pounds & pence?

Is the IFA going to be getting trail commission as well-if yes how much and ha this been included in the projections they have used to show lower charges than your existing FP plan?

How long have you got to go to retirement, as that can have a big influence on whether it is worth switching pension provider.

feesarefare

dunstonh wrote: »

1.5% initial is good. On commission basis.

How can you state that without knowing the transfer amount?

Bigsmak

feesarefare wrote: »

Can I ask what does that equate too in pounds & pence?

Is the IFA going to be getting trail commission as well-if yes how much and ha this been included in the projections they have used to show lower charges than your existing FP plan?

How long have you got to go to retirement, as that can have a big influence on whether it is worth switching pension provider.

The IFA has to include all the commission including renewal when projecting. The time frame also has to have been taken into account.

feesarefare

Bigsmak wrote: »

The IFA has to include all the commission including renewal when projecting. The time frame also has to have been taken into account.

And they are are also meant to do lots of other things as well.

Welcome to MSE big man;)

ps has he pmd you yet-lol

Bigsmak

feesarefare wrote: »

And they are are also meant to do lots of other things as well.

Welcome to MSE big man;)

Hi..

Thanks for the welcome! (Although I've been a member longer than you! :beer:)