Friends Provident -> transfer/repension?

goldnet

Hi all

I have three Friends Provident NGP personal pensions - one that takes contributions, one that was my SERPS/S2P Protected Rights fund (I have since contracted back in) and a small transfer in from another company. Total value around £100k. These were set up via a flat-rate fee arrangement, so I pay no commission and get a discounted AMC on most funds (standard AMC is 0.5%, with slightly higher rate on the transfers and additional fund charges on externally managed fund choices).

I have just viewed fund performance and actioned some switches into what I believe is a better performing/balanced selection. Many of the FP/FL funds were languishing in bottom quartiles. The fund range is also a little limited compared to their current offerings.

I am also about to resume contributions following a couple of years where these came from my employer as part of a salary sacrifice (I am in my middle 50s).

With Friends Life having reorganised their business, changes in plan charges and the attractions of Cavendish fixed-fee repensions, I wonder about my most effective options. Do I:

- start a new plan with Aegeon/Standard Life/Scottish Widows and the like via Cavendish although all providers charges are higher than the 0.5% I'm paying (but may offer better performance?);

- transfer/repension the whole FP plan with Cavendish to FL or one of the other providers to increase my fund choice/performance, even though charges seem marginally higher; OR

- simply to resume contributions to the existing funds with FP.

Just wondered about FL because their new personal pensions seem to offer a wider choice of funds than the NGP plan I'm on...

All comments very welcome...

Thank you

dunstonh

Many of the FP/FL funds were languishing in bottom quartiles. The fund range is also a little limited compared to their current offerings.

The NGP range was focused on simplicity. FP had a reputation at being good for fixed interest funds but like most insurers they were pretty poor with equities.

Their modern plans or non NGP plans were better in choice but reflected a different target market.

- start a new plan with Aegeon/Standard Life/Scottish Widows and the like via Cavendish although all providers charges are higher than the 0.5% I'm paying (but may offer better performance?);

Up to you. If you use an insurance company based personal pension then you are always going to have some limitations. It really depends on what limitations exist and if that affects your choice or not. i.e. are you going to have to compromise your investing because the insurer does not offer what you want? if yes, you pick someone else. If no, then you go with the one that offers what you need.

transfer/repension the whole FP plan with Cavendish to FL or one of the other providers to increase my fund choice/performance, even though charges seem marginally higher; OR

repension is just a word used by Martin. It doesnt exist in financial services. It is a pension transfer. Either internal or external if to another provider.

goldnet

The NGP range was focused on simplicity. FP had a reputation at being good for fixed interest funds but like most insurers they were pretty poor with equities.

Their modern plans or non NGP plans were better in choice but reflected a different target market.

Different target market? How would I know what that might be, whether it includes me or why might it affect me?!

Sorry for the ignorance but had several unsatisfactory relationships with IFAs who sold me allegedly the best available pensions at the time, which later turned out to be poor performers, high charges, probably high commissions and now are in closed funds or have high penalties to transfer out. So, sorry if I'm a sceptical - have felt keeping to lowest possible costs with reasonable performance is probably the better bet...!

Up to you. If you use an insurance company based personal pension then you are always going to have some limitations.

What alternatives do I have to an insurance company based pension - do you mean a SIPP where I select my own funds? Yes, I was attracted by the HL SIPP for its low cost, until the platform fee appeared and other providers seem to have high annual costs plus transactions charges.

repension is just a word used by Martin. It doesnt exist in financial services. It is a pension transfer. Either internal or external if to another provider.

OK. Part of my original query was whether I gain any advantage over my current position by transferring the NGP pension (which you say is an old one where the equity funds are poor which is also why I have put 50% of it into the Baillie Gifford 60/40 Managed and International Funds) with a 0.5% AMC to a newer-style one with a wider fund selection but also a marginally higher AMC via Cavendish?

I read reviews of Personal Pension schemes which say, for example the Aegeon or Aviva plan, offers best performance. I don't understand how one can make this comparison - doesn't it depend on what funds are selected? Or do the comparisons always assume the 'default' managed fund for each provider is selected?

Finally (promise!), is there a difference in cost or performance for a particular fund where it has pension and non-pension variants? I mean, is there any benefit to holding a fund as one of those offered within a personal pension plan and holding the non-pension variant of the same fund within a SIPP?

Thanks for your advice...

dunstonh

Sorry for the ignorance but had several unsatisfactory relationships with IFAs who sold me allegedly the best available pensions at the time, which later turned out to be poor performers, high charges, probably high commissions and now are in closed funds or have high penalties to transfer out. So, sorry if I'm a sceptical - have felt keeping to lowest possible costs with reasonable performance is probably the better bet...!

Pensions dont perform. The investments within them do that. Were the investments poor or was the area of investment poor in the period in question (i.e. the dot.com crash, global recession/credit crunch etc)

Pensions, like many investments have changed so much over the years that many go out of date quite quickly. The best plans of 5 years ago are no longer the best ones today. The best ones of 10 years ago can actually look very poor compared to today. Go back another 10 years and they look positively dated (some exceptions apply). However, that applies to any retail market.

What alternatives do I have to an insurance company based pension - do you mean a SIPP where I select my own funds? Yes, I was attracted by the HL SIPP for its low cost, until the platform fee appeared and other providers seem to have high annual costs plus transactions charges.

HL isnt a low cost pension unless you solely invest in a few loss leading funds it offers.

I read reviews of Personal Pension schemes which say, for example the Aegeon or Aviva plan, offers best performance. I don't understand how one can make this comparison - doesn't it depend on what funds are selected? Or do the comparisons always assume the 'default' managed fund for each provider is selected?

Correct. Both providers offer the usual mainstream funds. Any comparison saying one is better than the other on the basis of performance when both can offer over 1000 funds really doesnt understand the subject and should be ignored.

Finally (promise!), is there a difference in cost or performance for a particular fund where it has pension and non-pension variants? I mean, is there any benefit to holding a fund as one of those offered within a personal pension plan and holding the non-pension variant of the same fund within a SIPP?

Sometimes there is a cost difference. However, there is usually not much in it.