Standard Life Pension

thriftybabe

We are awaiting the forms from Clerical Medical therefore once I receive this I shall have a little bit more information. I shall report back to the site once I have this information to hand. I am sure there will be something in it regarding his commission. Do I need his signature to sign everything to another IFA. In addition if indeed he has being doing this for himself rather than for us can i not do something about it?

dunstonh

Do I need his signature to sign everything to another IFA.

No. You are in control of the agency transfer. This is either done by you writing to the provider telling them that you want XYZ IFA (include address) to act on your behalf in future or your new IFA will have a template form already which you sign and they will send it to the provider (the latter is the most common method as the new IFA can usually ask for details about your existing scheme at the same time).

The idea of agency transfers is exactly for this sort of thing. It allows you to control who gives you advice. If the existing adviser had to sign to release it, that could be very awkward.

In addition if indeed he has being doing this for himself rather than for us can i not do something about it?

You can make a written complaint (it can be telephone or face to face but written is better). The term that applies to this frequent change of provider is "churning". When the money was paid to Standard Life, there would have been an initial charge. Unlike most personal pensions or stakeholders, with a SIPP, the charge actually comes out of your money. So, if he took 4% commission, then your fund was reduced by 4%. A stakeholder and most personal pensions dont do that.

The £600pm (assuming gross) being moved to CM, assuming he takes standard intial commission would be £1590 with renewal commission of £6pm after month 28. If it stayed with SL it would be £18pm.

thriftybabe

Dunston thank you so much for all your help. The £600 is net. From what you say then we would definitely be better off staying with SL due to the CM Commission. I shall await what comes in from CM however if it is another SIPP then I know that he is at it for his own gain.

alexifa

The £600pm (assuming gross) being moved to CM, assuming he takes standard intial commission would be £1590 with renewal commission of £6pm after month 28. If it stayed with SL it would be £18pm.

Clerical Medical have a fairly new contract that allows the adviser to add 0.5% annual management charge to it. This would provide initial commission of c. £4,500 for each £600pm nett pension.

£9,000 commission might have something to do with him moving it.

dunstonh

If he adds the 0.5% add takes full initial then the contract would cease to be cheaper than the SIPP. So, keep an eye out for that. The CM illustration would show the charges terms and look for the reduction in yield on the later pages (its after the bit that shows early year values if 7% p.a. is achieved). If it drops lower than say 5.1%, then sticking with the SIPP is the cheaper option.

EdInvestor

If it drops lower than say 5.1%, then sticking with the SIPP is the cheaper option.

This is equivalent to a charge of 1.9%.To see the effect of charges on your hard earned, go here:

https://www.fsa.gov.uk/tables and look at the pension section.

The charges there are based on 1.5% for the first 10 years and 1% thereafter.So your fund will suffer a worse effect.

Warning: doing this exercise might make you think twice about saving in pensions.

dunstonh

Warning: doing this exercise might make you think twice about saving in pensions.

Dont go silly on us now Ed. The SIPP invests in exactly the same funds that are available in ISAs. Are you now telling us that people shouldnt be investing in ISAs either?

This is equivalent to a charge of 1.9%.To see the effect of charges on your hard earned, go here:

Reduction in yield (where no initial charge exists) is typically 0.1% more than the actual annual charge. I put 1.9% in to account for initial charge and the extra 0.1%.

The FSA tables are not a reliable source of information as the default fund may be cheaper but it could easily be a naff investment option.

thriftybabe

I am definitely not moving it to CM. I am unsure what to do except that I am going to get well rid off IFA. I have been thinking of all sorts of ways of presenting a case but still want to have the info from CM which will, I am sure, state how much commission he is to receive. We are just so lucky that this site is up and running and can have great information available. Unfortunately it has totally put us off having an IFA at the moment. Not sure what we are going to do next but will let you know what CM info comes in hopefully in the next week or so.

thriftybabe

Sorry another couple of things he mentioned was that it was ring fenced i.e that if anything went wrong with the pension the government would back it. In addition I also wanted that my children would inherit it if myself and hubby died. I would be grateful for any advice on this. I am beginning to worry about these things also as he seems to have arranged everything to suit himself.

dunstonh

Sorry another couple of things he mentioned was that it was ring fenced i.e that if anything went wrong with the pension the government would back it.

Can you confirm that the pension is a "self invested personal pension plan" (SIPP)?

In addition I also wanted that my children would inherit it if myself and hubby died. I would be grateful for any advice on this. I am beginning to worry about these things also as he seems to have arranged everything to suit himself.

All pensions allow you to nominate the beneficiary(ies). Its a simple A4 form available from the provider.

Unfortunately it has totally put us off having an IFA at the moment.

Dont let it put you off. Two of the contributers on this thread are IFAs. The vast majority are fine but every profession has people that think about only themselves. He could come a cropper and you probably have enough of a case to be the one that causes him issues (which he needs or he will go off and try it on someone else).