Pension Advice Sort

tony4147

I work through an Umbrella company

dunstonh

The SW portfolio funds were brought in to be sold by low skilled sales reps at banks to low knowledge consumers. 1.25% pa. for such a basic scheme is damned expensive. Similar funds can be obtained for around 0.4%. p.a.

richbeth

tony4147 wrote: »

The advice I've had so far I don't consider to be very good, as I see my SL pension growing by only 4% a year and I don't know if it should be doing better or not.

Hi,
is at actually growing by 4% pa (and if so over what time perido) or is this the guaranteed minimum ?

RB

tony4147

richbeth wrote: »

Hi,
is at actually growing by 4% pa (and if so over what time perido) or is this the guaranteed minimum ?

RB

The £80K in the SL 'pension is split, £45K in the 'pension with profits' fund this is growing by 4% PA, and has the guarantee which lasts until I take an annuity with them or open market.

The rest (£35K) is in the 'pension millennium with profits' this hasn't got a guarantee and the last statement shows a growth of 1.5%.
both these funds are 'with profits' and may or may not have a final bonus and may also be affected by smoothing.

I have a bit of a problem with 'with profits' as I did have an endowment mortgage that didn't meets my expectations, I didn't loose any money but I didn't make much either after 25 years.

I do not know what to do with the SL pension. Over the years I've spoken to IFA's and they are very non committal, which isn't much help to me as I'm paying them for their advice.

dunstonh

I do not know what to do with the SL pension. Over the years I've spoken to IFA's and they are very non committal, which isn't much help to me as I'm paying them for their advice.

Were they actually IFAs or FAs?

How much have you paid for this non-committal advice. If I had someone contact me and hadnt paid for the advice then I would remain non-committal. If they paid the fee then they would get the advice. Did you actually get a written report on why you should or should not keep the fund or was it just a verbal conversation that took place?

tony4147

They are supposed to be IFA's, they are/were the advisers tied to my plans, so no I didn't pay.
The guy that set up my SL plan retired a few years ago and sold his business. The IFA that took it over didn't do anything, he wasn't proactive until I contacted him and asked for a review. He reviewed the SL said all he could recommend was moving to Scottish Life (I think) to reduce the management fees a small bit, and that it might not be worth moving it as I have the 4% guarantee with SL.

I then set up a new pension (Scottish Widows) with the Umbrella company I work through, as they will do the salary sacrifice for me but only as part of a group pension with SW, which to a certain extent is understandable from an admin point of view.
I asked this new advisor last year if he could review the SL pensions, he wrote a report which came back and said I should move the SL into the SW, but when I carefully studied the report it was reviewing an other persons pension. When questioned he blamed the person that typed up the report, did a new report that said to leave the SL alone, and waived any fee for the report.

So as you can see I have lost some confidence in the IFA and really expect an IFA to be proactive on my behalf.

Should I look for another IFA? but what is a reasonable fee to review the plans?

dunstonh

The guy that set up my SL plan retired a few years ago and sold his business. The IFA that took it over didn't do anything, he wasn't proactive until I contacted him and asked for a review. He reviewed the SL said all he could recommend was moving to Scottish Life (I think) to reduce the management fees a small bit, and that it might not be worth moving it as I have the 4% guarantee with SL.

Pensions of that era didnt typically pay any ongoing remuneration. So, the newer adviser wasnt getting paid for his time. I suspect that is why you never had anything hard and fast.

I then set up a new pension (Scottish Widows) with the Umbrella company I work through, as they will do the salary sacrifice for me but only as part of a group pension with SW, which to a certain extent is understandable from an admin point of view.
I asked this new advisor last year if he could review the SL pensions, he wrote a report which came back and said I should move the SL into the SW, but when I carefully studied the report it was reviewing an other persons pension. When questioned he blamed the person that typed up the report, did a new report that said to leave the SL alone, and waived any fee for the report.

Not great. However, it is probably a lucky escape. The SW pension is expensive and in basic fund.

So as you can see I have lost some confidence in the IFA and really expect an IFA to be proactive on my behalf.

An IFA will only be pro-active if you employ them to be. Advice is either transactional or servicing. Yours is currently set up as transactional. Ongoing servicing costs more but it does provide reviews, rebalancing etc

Effectively you never employed the second or third adviser.

Should I look for another IFA? but what is a reasonable fee to review the plans?

Your fund value is IFA territory if you want advice. I would also investigate whether salary sacrifice is worth it with that pension. You are paying around 3 times more than to in charges. You may be saving on the NI but you are paying over the odds for a basic fund. If this was an individual pension and not a group scheme then it would probably be classed as a mis-sale (basic fund available in stakeholder but at higher cost breaches rule RU64). I dont know if the calculation would show sacrifice as better or not but it would be worth looking at.

tony4147

I checked through the paperwork last night, the management fee for the Scottish Widows pension is 1.25% BUT because it is a group pension I receive 0.55% back, paid monthly, so the fee is actually 0.7%.

What would be an acceptable fee for an IFA to take a look at my pensions?

tony4147

I've done some more digging regarding my standard life pensions. SL have told me that the with profits have NO fees/management charges. The growth rate on the vast majority is guaranteed to be a minimum of 4% as long as I stay with SL, this is a paid up pension plan.

I've spoken to my IFA regarding my Scottish Widows group pension which is in their Pens Portfolio 2 about moving some of the monies into other funds with SW and have been told that I can't move some or redirect new contributions into another fund I have to move the LOT. This seems very, very restrictive of SW, as I was thinking of moving 50% into the balanced fund which seems to have outperformed the Pens 2 but my IFA is advising to leave it where it is as.

dunstonh

SL have told me that the with profits have NO fees/management charges.

That is really poor. Don't believe it for one minute. I bet you if the IFA did a pension comparison it would show there are charges.

I've spoken to my IFA regarding my Scottish Widows group pension which is in their Pens Portfolio 2 about moving some of the monies into other funds with SW and have been told that I can't move some or redirect new contributions into another fund I have to move the LOT. This seems very, very restrictive of SW, as I was thinking of moving 50% into the balanced fund which seems to have outperformed the Pens 2 but my IFA is advising to leave it where it is as.

SW did have some products which were limited over the IFA version and designed to be sold via the LTSB branches. You can only access the fund range available to that product and not those available to other products.