Independent Financial Advisors & Pensions

jem16

JoeCrystal wrote: »

As I understand it, the annual commission is set at 1% of the total annual premium. That is how it is typed out.

Joe

Thanks.

Does the IFA get the 1% commission and you also pay an annual management charge to Scottish Widows for the pension?

JoeCrystal

jem16 wrote: »

Thanks.

Does the IFA get the 1% commission and you also pay an annual management charge to Scottish Widows for the pension?

I believe so. It is paid out of the charges by Scottish Widows. If my memory have not fail me, the single payment have an AMC of 0.550 % and the regular payment have an AMC of 0.700 %

Cheers

Joe

jem16

JoeCrystal wrote: »

I believe so. It is paid out of the charges by Scottish Widows. If my memory have not fail me, the single payment have an AMC of 0.550 % and the regular payment have an AMC of 0.700 %

Cheers

Joe

Ah right I'm with you now having looked at your edit. It's 1% on contributions as opposed to trail commission.

dunstonh

There is a trend with many IFAs from 0.5% to 1%. Typically by taking much less up front. Mainly on small values (upto £100k-£200k).

Also, after reading the re-pensioning thing, i thought it would be a good idea to pay up front all your dues to the IFA & to NOT have it dragging out over time where they keep getting paid off from you?

Paying the IFA via the pension gets rid of it straight away (or over the first 12 months typically). Not the whole term. Remember that MSE article is over 3 years out-of-date. Even the products mentioned in there dont exist any more and take no account of modern multi-charge plans. For example, an IFA charging £1500 for someone aged 30 can come in cheaper than a nil commission stakeholder via cavendish using exactly the same investment funds.

Nine_Lives

Much appreciated. I may have to delay the meeting with the IFA then if the fee is to be around this figure.

I did go via the unbiased website & found 3. 1 link was dead so i emailed the other 2 yesterday, 1 of which replied today.

All of them were advertised as being available to be paid by either commision or "fees". Obviously there's a difference between the two, but is there a difference in real money terms? I assumed fees would be better as i (again: assumed) you pay there & then & that's the end of y our payment to them?

I should probably see one then as i really don't have a clue. Need to save up.

& Joe, without my overtime, i'm also on about 14k. With overtime i got 18.5k last year, but overtime is being cut heavily this year.

Nine_Lives

One i should ask before i call it a night...

When visiting the IFA ... what questions should i ask? What info should i be looking for? I have a few questions as it is, but i may not be asking the right questions.


EDIT: Also, when there's the option to pay via fees or commission .... what would you choose?

SallyG

Not sure if this is the same for all Scottish Widows online pension statements and for all pension provider fund statements but for my stakeholder and now income drawdown with SW there's no separate tally/account of the charges - it just shows the unit price,the number of units and the fund total - you can't tell if it's the investments going up and down or charges being taken from your fund - or both.
I feel they should show me clearly what change is due to investment fluctuations and what reductions are charges going to Scottish Widows.
It feels as though they're trying to hide their charges.

jamesd

For a pension the most efficient way to pay an IFA is to pay by fee but to pay the fee by having an initial commission taken out of the pension that exactly matches the fee. This is best because the money in the pension has tax relief so you're effectively getting tax relief on the IFA bill.

jem16

SallyG wrote: »

Not sure if this is the same for all Scottish Widows online pension statements

If I use SW online account, I can click on Unit History and it tells me the exact amount of charges taken off each fund monthly.

What options do you get?

EDIT : Joe pointed out some Notes on the Unit History page which I hadn't noticed and which are relevant.

Notes - An AMC of 1% has been taken into account in the Unit Price. Any AMC Adjustments shown above relate to units bought/deducted as a result of an AMC other than 1%. See Policy Benefits for further AMC details.
The AMC shown above does not take any external fund management charges into account.

So basically assume an AMC of 1% unless there are adjustments shown in the Unit History.

Nine_Lives

Another one i thought of:

When speaking to HR at work, they said that the best option for me would probably be going through their 'advisor' and having the cash taken out of my wage instant.

First off, as already said, i know how the company i work for operates. They are always trying to get one over on their customers (& staff) to make even just a few pence (1 example being a customer ordered a cill at a cost of a good few £100 & it came in cracked. The boss tried to hide the crack in order to say the customer broke it. Watering sand sold so that it weighs heavier i.e. the customer gets less for their money is another). This is one reason i'd be reluctant to go through them as i simply can't TRUST them.
The other is this HR woman i spoke to clearly had about as much clue as i did, so her advice means diddly squat to me.


If i went elsewhere, which i'm more than likely going to do, can i still have the money taken out of my wage instant, or do i have to make manual payments myself?


& also as before ... any questions that i should be asking the IFA?