Standard Life transfer to Vanguard Charges

EdGasket

Just had a letter from Standard Life (SL) that says they are moving the management of my FTSE tracker to Vanguard, that there are costs associated with the transfer and these will be reflected in the price of your (my) fund.
Surely they cannot do this? The only charge they are allowed to make on my Stakeholder pension, to my knowledge, is the 1% annual charge on the fund's value. It is not my choice that they transfer their fund management company so why should I pay for it? Is this legal?

ermine

On the other hand Vanguard have a bloody good reputation with very low TERs. So before spitting bricks you could do well to educate yourself what TER you are currently paying, what TER the vanguard fund will offer you and how long it will take to recoup the costs you are being asked to pay.

Always pays to have the facts before having a jolly good moan. You might be right that it's a ripoff but your case would always be made better if you can say how much you believe you are beibg ripped off and for what reason.

You might be pleasantly surprised here...

dunstonh

You are misreading the costs. Take another look.

yvonnemaus

Well I too am absolutely livid about this.:mad:

Ermine, although Vanguard may well have a good reputation, you are not buying the standalone Vanguard funds. The funds are wrapped up into a new form with new terms.

(1) There is a cost to actually making the move. Who pays? Quote Standard Life: "There are costs associated with the transfer... these will be reflected in the price of your funds". The customer pays.:mad:

(2) Why are they doing it? From a financial viewpoint, no doubt they will be more profitable, i.e. make more money. And also Vanguard get a new job and make money. Where is this money coming from? The customer. But how? One could easily think that surely it's a Vanguard fund with the same internal charges, inside or outside a Standard Life pension wrapper.
Quote Standard Life: "the investment performance may be different from what you would see if you invested directly in the underlying Vanguard investments. These difference can be due to charges...". :mad:
I have always avoided "multi-manager" funds or "funds of funds" where there are multiple levels of charging.

(3) Remember Equitable when it all went wrong 10 years ago? They ignored people's demands to transfer out for years, in the meantime taking large chunks out of their funds (including one of my close friends)(still alive)(still waiting). Currently Standard Life can delay transferring out by up to a month. Under the new Vanguard scheme, Quote Standard Life: "...could potentially delay processing payments out of its funds indefinitely...". So your money could be confiscated for good.:eek:

(4) I did not ask for, or agree to this. But Standard Life have delayed telling customers until its too late to jump ship and at least avoid paying them for carrying out the conversion.:mad:

(5) Quote Standard Life: "You'll find a full list of the newly launched Vanguard tracker funds...at standardlife.co.uk/funds". Can't find this to even start to check details.:mad:

Myself, by Monday I will have applied to transfer out to a low-cost SIPP with Sippdeal. In this way you get transparency of very low charges and can buy really low cost funds, included trackers you can switch online at 10 seconds notice if you don't like them (ETFs). I've been looking at Sippdeal for a long time, and this is the push I needed. (See sippdeal.co.uk/Sipp/Offer ) :T
I already operate my ISAs in this way (with iWeb), investing in Blackrock iShares and DeutscheBank x-trackers. It's the way to go for index funds. Vote with your feet:beer:

yvonnemaus

EdGasket (clearly blown!),

Maybe the unit prices will be nobbled at changeover and we will notice a big deduction in overall £ value.

EdGasket

I have already sent a complaint to SL (limited to 350 characters by their stupid form!); will report back if/when I hear anything. I might call monday but don't like phoning. The problem with phoning is that they could tell me anything to appease me and if it turns out not to be true i have no proof.

The point is, and correct me if I'm wrong, I don't think they can make extra ad-hoc charges to a Stakeholder Pension. What they propose is illegal imho.

dunstonh

I have already sent a complaint to SL

Personally, i would be sending a letter into them congratulating them on picking Vanguard.

The point is, and correct me if I'm wrong, I don't think they can make extra ad-hoc charges to a Stakeholder Pension. What they propose is illegal imho.

It is certainly not illegal. It is not unlawful either. Again, you are misreading the charge.

EdGasket

I thought Stakeholder pension charges were agreed upfront and they couldn't start hiking them? Mine were settled at 0.9% and I haven't agreed to a penny more. I too will be uprooting my pension as soon as it is convenient if they make any additional charge by artificially reducing the Fund's price that I am invested in.

dunstonh

I thought Stakeholder pension charges were agreed upfront and they couldn't start hiking them?

They can increase or reduce them as long as they do not exceed 1% (1.5% for the first 10 years).

EdGasket

Maybe but in my case we agreed 0.9%.

What happens if I shift my pension and a NICO contribution gets received (normally around July) by SL? Do they send it back to NICO or forward it on to the pension company I transfer to?

yvonnemaus

It's not to do with annual management charges exceeding 1%.

It 's to do with the unit price taking a dive.

Example: you own 500,000 units.
They are priced at £1 each :T
The next day the new units are priced at 90p:(

You paid £50,000 towards Standard Life's internal business administration, so they can be more profitable.