Your thoughts on Winterthur?

Steve1963

My IFA is recommending I move my private pension from Prudential to Winterthur ( The pension is inactive as I now have a company pension). The figures look good (despite higher charges) and my IFA has a good reputation, but before I sign I just wanted a bit of feedback from your experiences on the company generally.

Thanks

Steve

LizEstelle

My OH was with an Aussie outfit called Colonial Mutual for both an AVC and subsequently full private pension. Their business was sold to Winterthur and the performance immediately seemed to go downhill. Our adviser told us he'd be better off 'freezing' them both and recommended starting up a Standard Life stakeholder instead.

Same story with the endowment policy which we also had originally with CM. As soon as Winterthur got their hands on it, the annual bonuses collapsed to zero and haven't been paid now for 4-5 years. I rang them recently and the party line is that they 'hope' to do something about this as soon as their situation is stabilised - and claim that, by way of compensation, their terminal bonus rate has been upped recently to somewhere near 13% of maturity value.

We put in a misselling complaint and I have to say this was handled quite fairly - we ended up with a compensation cheque for £6k.

Don't know if this is at all helpful.

Steve1963

Thanks. I'd heard about the problem with their endowments but they dont do them now. The info my IFA has given seems to say dont expect any early returns but I should do well at the end (subject to the usual small print warnings).

Steve

EdInvestor

Steve1963 wrote:

My IFA is recommending I move my private pension from Prudential to Winterthur ( The pension is inactive as I now have a company pension). The figures look good (despite higher charges) and my IFA has a good reputation, but before I sign I just wanted a bit of feedback from your experiences on the company generally.

Is the Pru pension in the With profits fund? This WP fund is the best one in the UK: it was hardly affected by the stockmarket crash.It would semm unnecessary to move it. If it is in the WP fund, does it have any guarantees attached?

What is the basis for the transfer exactly? Lower charges,poor performance?

If the fund the pension is currently invested in has performed poorly, has the IFA considered switching to other funds offered by the the Pru for the pension you have? This is usually free,but will generate no money for the IFA unless you are paying him a fee for the advice.

The IFA should give you a report explaining in detail why he has recommended the transfer and outlining his fees/commission, plus the "Reduction in Yield"(RIY) that charges will have on the pension fund.Have you seen this report yet? What figure is mentioned for the RIY?

ReportInvestor

If the IFA is recommending a switch to the Winterthur unitised With Profits fund from the Pru WP fund then try quoting the following 5 year performance figures at him:

Wintertur unitised WP fund +7.3%
Prudential WP +21.2%

I would expect that he's flogging some other Wintertur funds. They seem to have a fairly wide selection - including some out of house big names.

I've still got some money with that Pru fund and the performance has been OK over about 12 years.

dunstonh

I lot of IFAs use Winterthur. I havent used them in over 3 years. There is nothing wrong with them and the product is fine. However, I just have a preference for certain other providers who can interface with my back office software and reporting which makes monitoring and future recommendations easier.

The move out of Pru into another pension makes sense. Only 2 Pru pensions I have seen in recent years have been worth keeping. The rest could be improved upon by using modern plans. However, that only applies if a decent spread of funds is being used with Winterthur.

Pension transfers are treated as a higher risk level transaction. The adviser cannot just tell you to switch for the sake of it. There has to be clear advantages which must be documented and proven. Pru's charging structure makes that easy along with limitations in their fund selection.

With respects to Liz, Colonial Mutual were a mess and Winterthurs actions with them are a consequence of Colonial's actions and not their own. You do have to wonder if Winterthur actually regret the day they got involved with CM.

None of us here have the facts, your adviser does.

EdInvestor

It would be interesting to compare the Winterthur offer with Standard Life's personal pension, which AFAIK these days features low charges and a dazzling array of quality funds, both inhouse and external.

Of course low charges are an attraction to the investor, rather than the advisor, usually. :rolleyes:

Steve1963

Thanks for all your input. I have had a detailed report from my IFA. It seems to say that the PRU does not actively manage my pension fund now so it will perform poorly compared to more dynamic, but not risky, managed funds with Winterthur. He clearly states the fees with Winterthur are higher but more than covered by incresed return, plus I will be able to invest further which I cannot do with the PRU.

Think I'll go with his advice. My old boss uses his services and she was no-ones fool when it came to money.

Steve

dunstonh

Good for you Steve. The product is fine, the fund range is fine, the charges are fine.

Of course low charges are an attraction to the investor, rather than the advisor, usually. :rolleyes:

You are not an adviser Ed. So why do you send everyone down the more expensive route all the time?

EdInvestor

I haven't sent anyone down an "expensive route."

We have yet to see a comparison of the Reduction in Yield of the two products ,so we don't know which is the more expensive, do we?

I get the impression the OP has no idea either. :rolleyes:

All he says is:

The figures look good (despite higher charges)

What figures?