Independent Financial Advisors & Pensions

westy22

You could try talking to Cavendish Online http://www.cavendishonline.co.uk who act as execution only intermediaries and have a good working relationship with Fidelity FundsNetwork. I know that they offer a range of pensions so they might be able to help you to set up a suitable policy for a small one-off fee.

jem16

Jegersmart wrote: »

Recently I learned that I have a defined benefits pension scheme that I also want to transfer. I have been told by Fidelity that what I have now is a Fidelity SIPP whereas what I would need to transfer a defined benefit pension to would be a "Fundsnetwork SIPP". This seems in line with other providers who have "Select" and "Full" SIPP's as far as I can tell. In this case Fidelity has told me that I need an IFA linked to this type of SIPP as I am not qualified to make this decision myself. So my question is that I assume there are quite a few people like me around that have a lot of experience in investing, work in the financial markets and have done for along time who are not really interested in too much advice but want a "Full" SIPP in place to take control of some of the decisions around my own future? If so, what is the best way to go about this?

The problem is not so much "full" SIPP or otherwise. The problem is that any defined benefit scheme has to be signed off by an IFA as what you are wanting to do is seen as high risk. 9 times out of 10, moving out of a defined benefit scheme will be wrong so there's a pretty small chance that doing it will be the right thing to do - hence the need for an IFA to do a full transfer analysis.

In this particular case would I benefit from paying a flat one-off fee (if possible) to get the SIPP linked to them so I can in fact open one and then the rest is up to me

Finding one willing to do the transaction will be your main problem as the chances of it being wrong and it coming back to bite them are extremely high. Many IFAs will simply not touch it or price it so highly you wouldn't want to do it.

and no further charges would be due or would I always be paying "the man off" until I retire for not a lot of advice (if any). If there are ongoing charges what are they? 1% of total value of pension? How are they paid?

No need for ongoing advice but that will be the least of your problems.

The cynic in me says that because kickbacks are ending then this is a great way to ensure that I *have* to pay for an IFA whether I want one or not.

As I said it's down to the high risk nature of such a transfer and the high chance that doing it is actually wrong.

jem16

westy22 wrote: »

You could try talking to Cavendish Online http://www.cavendishonline.co.uk who act as execution only intermediaries and have a good working relationship with Fidelity FundsNetwork. I know that they offer a range of pensions so they might be able to help you to set up a suitable policy for a small one-off fee.

I'm not sure it would help in this case as an IFA is required to sign off all defined benefit transfers.

Nine_Lives

Right then, i've done a bit of googling & this is the conclusion i come to (hoping i've grasped this all correctly).

Basically, a Stakeholder pension is for me. What to invest in is another question as i really wouldn't have a clue.

But i was looking at the differences & the stakeholder being limited at £3.6k (i wouldn't be going over this so being able to invest more elsewhere would be irrelevant).
More flexibility, less fees.

Everything i read pointed towards stakeholder. I'm not naturally a high risk taker. I'm a very cautious type of person, not just money, but life in general. I would be looking at medium risk i would think.

I can't see how a personal pension option would benefit me in my situation really.


Now i don't know if this is the right conclusion, but it's what i've come to.


Out of interest, how do you know so much about the topic jem?

jem16

K_P83 wrote: »

But i was looking at the differences & the stakeholder being limited at £3.6k (i wouldn't be going over this so being able to invest more elsewhere would be irrelevant).
More flexibility, less fees.

I don't know what you have been looking at but it's either out of date or you have misunderstood it.

First of all there is no £3,600 limit for a stakeholder, or for any other pension for that matter. I think you may be getting confused with the limit of £3,600 for tax relief for a non taxpayer. For a taxpayer you get tax relief on 100% of your earnings up to a maximum of £50k - that is for all types of pension.

Flexible - yes it could be that as it's better suited for low payments and for stopping and staring payments.

Less fees - that's no longer the case. When the stakeholder was first introduced it had a cap of 1%amc which did lower the cost of pensions. However nowadays, unless you need the flexibility of lower contributions and stop/start payments, then a stakeholder is probably best avoided. With a contribution of £100pm or more a modern personal pension will beat the stakeholder on fees.

Everything i read pointed towards stakeholder. I'm not naturally a high risk taker. I'm a very cautious type of person, not just money, but life in general. I would be looking at medium risk i would think.

Risk has nothing to do with stakeholder or not. The exact same funds available in a stakeholder can be put into a personal pension. However the personal pension has the advantage of having more and often better funds so a better portfolio can usually be built.

I can't see how a personal pension option would benefit me in my situation really.


Now i don't know if this is the right conclusion, but it's what i've come to.

If you are planning on contributing at least £100pm then no I don't think it's the right conclusion.

Out of interest, how do you know so much about the topic jem?

I've picked a lot up through being on these forums and listening and learning. I've picked an awful lot more up through my adviser who has taken the time and patience to help me learn. I still leave the fund choice and management of my investments to him as I haven't the time (normally) nor probably enough knowledge as yet to do that well enough.

Nine_Lives

Thanks for the feedback. My links are perhaps out of date. Either that or i've misunderstood. Clearly one of them. These are the links i found while looking up:

http://www.pensionschampions.co.uk/?q=node/19
http://www.getfinance.co.uk/stakeholder-pensions/the-difference-between-stakeholder-pensions-and-personal-pensions.html
http://www.pensioncheck.co.uk/stakeholder-employees.htm
http://www.encorehrportal.co.uk/pension-schemes/pension-planning-for-the-self-employed/the-difference-between-a-stakeholder-pension-plan-and-a-personal-pension-plan/

Looking at it, i'd forgotten to read that pensioncheck.co.uk link

At the moment, i'd be looking to put more than £100pm into the pension. When we move out of my folks home & have our own place, that figure may or may not change, but our spends will certainly increase.
Also, i wouldn't be intending to do any stop/starting of payment. The only thing that would force me to do that would be being signed off for a prolonged period of time, being made redundant or sacked.

jem16

K_P83 wrote: »

Thanks for the feedback. My links are perhaps out of date. Either that or i've misunderstood. Clearly one of them. These are the links i found while looking up:

http://www.pensionschampions.co.uk/?q=node/19

Definitely out of date - 2006/7

http://www.getfinance.co.uk/stakeholder-pensions/the-difference-between-stakeholder-pensions-and-personal-pensions.html

Very bad explanation -does mention £3600 as the annual limit but if you click through to the actual Stakeholder section, you will see that is for those with no earnings as I said.

http://www.pensioncheck.co.uk/stakeholder-employees.htm

That one is better.

http://www.encorehrportal.co.uk/pension-schemes/pension-planning-for-the-self-employed/the-difference-between-a-stakeholder-pension-plan-and-a-personal-pension-plan/

Not too bad but very basic.

At the moment, i'd be looking to put more than £100pm into the pension. When we move out of my folks home & have our own place, that figure may or may not change, but our spends will certainly increase.
Also, i wouldn't be intending to do any stop/starting of payment. The only thing that would force me to do that would be being signed off for a prolonged period of time, being made redundant or sacked.

Most of that points to a personal pension being best.

Nine_Lives

Cheers Jem.

lol, the one link i'd missed reading turns out to be the best one.

Would the IFA be wanting expenditure details i assume?

I have spreadsheets detailing my progression from 2005 also. These include money in & out for the month. Balance at the start & end of the month. Yearly progress figures. P60 figures. Would these be any good to the IFA or is this going overkill?

I know what i want to know. The OH needs to sort out what she wants to know & then we can get moving with this.

Lokolo

Most probably overkill, but the IFA will want to know what you plan to get out of the pension and how much you plan on putting in as this will help make a decision as to which pension to go for.

They won't need to know you spend £120 a month on groceries!

Jegersmart

jem16 wrote: »

The problem is not so much "full" SIPP or otherwise. The problem is that any defined benefit scheme has to be signed off by an IFA as what you are wanting to do is seen as high risk. 9 times out of 10, moving out of a defined benefit scheme will be wrong so there's a pretty small chance that doing it will be the right thing to do - hence the need for an IFA to do a full transfer analysis.



Finding one willing to do the transaction will be your main problem as the chances of it being wrong and it coming back to bite them are extremely high. Many IFAs will simply not touch it or price it so highly you wouldn't want to do it.



No need for ongoing advice but that will be the least of your problems.



As I said it's down to the high risk nature of such a transfer and the high chance that doing it is actually wrong.

Hi

Thanks for the useful reply. If your "9 out of 10" statistic is correct then it is perhaps best to keep it where it is. In this case though, the Policy is not dependent on performance of investments, the benefits were secured by the payment of a single premium by the former Trustees, where I as prefer to use my "skills" in investing to grow the "pot" and to have some flexibility in terms of when I retire depending on health and so on. This scheme has a GMP element which becomes active when I am 65 - IF I get to 65 - and then there is a non-GMP element which has no date stipulated.....

It may well be that I need to take some advice on this which I am becoming open to to ensure I do the right thing for me and my circumstances.

Any other comments welcome.

J