Aegon pension - right for me?

sterling2

I am 57 and self employed. My IFA has suggested I take out a Flexible Pension Plan with Aegon with a proposed nett monthly premium of £600.00. The proposal is to use the Multi Manager Openwork Omnis Balanced Fund. My concern is the fees and commission payable.
There is a Financial adviser charge of 50% per month from the fund built up by my contibutions payable for the first 12 months, this is along with an yearly management charge of 2.5%. There are small 'monthly refunds' payable dependant on fund size which will reduce the yearly fee.
The illustration states that my IFA will be paid £4725.00 immediately plus an annual commission.
With an almost zero knowledge of pensions, I find this commission scary. Are they all like this or have I picked a bad one??
Advice please.Many thanks

dunstonh

In my opinion...

product is fine. It is typically right up there with the low cost options. However, you are using a multi-tie commission based advice service and its damned expensive. You keep using the term IFA but the person you are seeing is not an IFA. They are multi-tied sales rep/FA.

With an almost zero knowledge of pensions, I find this commission scary.

So do I. However, that is what you get if you choose commission. You could probably find a local IFA willing to do it for a quarter of that, using the same contract and a better quality fund at more than half the cost.

Are they all like this or have I picked a bad one??

Its not bad. Its a limitation of using a commission based FA rather than a fee based IFA. (fee can be paid via the pension contributions but you agree the level between you)

Aegis

sterling2 wrote: »

The illustration states that my IFA will be paid £4725.00 immediately plus an annual commission.

This is an astonishingly high level of commission, especially for such a simple piece of advice (i.e. one platform, one fund). Ask him what he would charge on a fee basis to do it all at zero commission. Then shop around a couple of other local IFAs to see what they would charge you to set up a simple pension arrangement.

I've seen people investing the better part of a million charged less than that!