Dismal pension performance

Faraday_Cage

jamesd wrote: »

QUOTE]


Good advice and sound reasoning, jamesd, thank you very much.

I like your suggestion of commercial property. I had a Legal and General Commercial Property Bond for many years and it did really well. I did stay in a bit too long and got my my fingers burned when it dived in '08 but still did OK. Now could be a good time to get back in.

Interestingly, I also had a Sterling commercial property bond at the same time but that was very lacklustre compared with the L&G one, probably due to commission and charges I think, and I got out before it crashed.

Faraday_Cage

atush wrote: »

This would have been my advice, ie a Sipp, if you have been investing outside a pension and doing well. I think, getting into Skandia wasn't your(your advisors mistake) but what you invested in INSIDE the skandia platform may have. Did you choose the funds? Did they? Did they choose just the expensive Managed funds? Why didn't you choose for your Skandia pension the funds you invested in outside?

All the funds in the Skandia PPP were chosen by the IFA.

Alarmed by the abysmal performance of the Standard LIfe Pension, I chose to 'play safe' and take advice on the pension but carry on dabbling with Unit/Investment Trusts myself outside of the pension, as it was money I could pretty much afford to lose (I'd already taken out most of my original capital). I didn't want to take any more risks with the Pension as it was so important. Bit ironic, with hindsight.

Anyway the advice was to transfer to Skandia and switch funds at the same time. To what extent this advice was commission-motivated I don't know. In fairness, Skandia does have a much bigger fund choice.

It would be easier to stay with Skandia if I can but I will want to invest in new funds and I need to find out if I can do this without an IFA - I suspect not.

Thank you for your advice and encouragement.

dunstonh

So how would you buy through them with no initial charge? Or are you forced to go via an IFA, who'll presumably want a cut even if you've decided for yourself exactly what you want to invest in?

Not necessarily. IFAs often do execution only business/direct to provider basis with discounts.

Anyway the advice was to transfer to Skandia and switch funds at the same time. To what extent this advice was commission-motivated I don't know. In fairness, Skandia does have a much bigger fund choice.

you said it was about £800. So, hardly anything. Plus, Skandia had a cap which was lower than most providers out there. So, commission would not have been a motivator as he could have earned more elsewhere. Skandia were the first provider to offer external funds. They were years ahead of others. You got a quality option. I had a Skandia Life pension which I transferred internally to a Skandia Investment Solutions pension which is still there (although not for much longer)

It would be easier to stay with Skandia if I can but I will want to invest in new funds and I need to find out if I can do this without an IFA - I suspect not.

Yes you can as long as you get on the latest contract and not a legacy version.

jamesd

Faraday_Cage wrote: »

Anyway the advice was to transfer to Skandia and switch funds at the same time. To what extent this advice was commission-motivated I don't know. In fairness, Skandia does have a much bigger fund choice.

For quite a while Skandia could come out very cheap compared to alternatives. How cheap and if cheap or not depends on your particular deal.

Faraday_Cage wrote: »

It would be easier to stay with Skandia if I can but I will want to invest in new funds and I need to find out if I can do this without an IFA - I suspect not.

Skandia may have a higher annual charge with no linked IFA, not sure. I thik it can be set to let you do the dealing but if not you can always just tell the IFA what you want to do and make them earn any trail commission they are getting. Since they did the investments it's likely that they are on 0.5% trail commission but that may still leave you with a discount overall, just can't tell because pricing varies.

zagfles wrote: »

Could you give an example please, for instance how you could invest in Aberdeen Emerging Markets for no initial charge and a discounted AMC outside of a SIPP?

That's a strange question. Paying no initial charge is standard for almost all personal pensions, SIPP or not. Discounted AMCs are also routinely available, you'll find that at many personal pensions, whether a Self-Invested Personal Pension or fund-only based Personal Pension. Full cost, no advice places like HL are becoming the exception, not the rule, as demonstrated by them feeling enough pressure to finally start offering a small discount.

Sure you didn't think that SIPP means pensions where you choose the funds, which is commonly available in non-SIPP personal pensions also? SIPP covers the investment types allowed, it says nothing at all about who picks those investments. SIPP only needed if not buying funds.

You can get one IFA-only product that has identical pricing in both SIPP and non-SIPP versions. The best buy pensions list at this site also has a range of no initial charge and discounted annual charge options. Plenty more out there, just takes doing a little shopping.

The exceptions to no initial charge have tended to be if a commission has been used to pay an IFA charge or just some poor deal products, whether using an IFA or not.

zagfles

jamesd wrote: »

That's a strange question. Paying no initial charge is standard for almost all personal pensions, SIPP or not. Discounted AMCs are also routinely available, you'll find that at many personal pensions, whether a Self-Invested Personal Pension or fund-only based Personal Pension. Full cost, no advice places like HL are becoming the exception, not the rule, as demonstrated by them feeling enough pressure to finally start offering a small discount.

Sure you didn't think that SIPP means pensions where you choose the funds, which is commonly available in non-SIPP personal pensions also? SIPP covers the investment types allowed, it says nothing at all about who picks those investments. SIPP only needed if not buying funds.

You can get one IFA-only product that has identical pricing in both SIPP and non-SIPP versions. The best buy pensions list at this site also has a range of no initial charge and discounted annual charge options. Plenty more out there, just takes doing a little shopping.

The exceptions to no initial charge have tended to be if a commission has been used to pay an IFA charge or just some poor deal products, whether using an IFA or not.

Well it might be a strange question, but you haven't answered it! I've had a look at the pension best buys on this site. They all seem to either not rebate trail commission, or they have annual charges/initial admin charges etc.

So where can I go to get a pension which allows me to choose funds like Aberdeen Emerging Markets with no initial charge, no IFA fees, no initial/annual charges for the wrapper, rebate of all the trail commission, and no charge for switching, irregular contributions etc? Because I've not found one.

dunstonh

So where can I go to get a pension which allows me to choose funds like Aberdeen Emerging Markets with no initial charge, no IFA fees, no initial/annual charges for the wrapper, rebate of all the trail commission, and no charge for switching, irregular contributions etc? Because I've not found one.

No such product exists or will ever exist as you are effectively asking for a product that doesnt pay the retailer.

zagfles

dunstonh wrote: »

No such product exists or will ever exist as you are effectively asking for a product that doesnt pay the retailer.

So it seems you have a choice of either paying via non-rebate of all the trail commission, or paying via some other charges.

Say I have £50,000 in various funds, say 10 typical funds like Aberdeen Emerging, Henderson European SS, Jupiter India, Artemis Strategic Assets.... What would be the cheapest way of holding them in a pension wrapper? Is HL really that bad value? Who is significantly cheaper?

dunstonh

Is HL really that bad value?

No. However, they are not cheaper than an IFA on larger cases. They will be cheaper on smaller value cases

zagfles

dunstonh wrote: »

No. However, they are not cheaper than an IFA on larger cases. They will be cheaper on smaller value cases

Even with say 200-300k in 20-30 funds, with variable investments at random intervals, and frequent fund switching?

dunstonh

Even with say 200-300k in 20-30 funds, with variable investments at random intervals, and frequent fund switching?

An IFA should beat them as they can stick it down as no-trail. So, a small set up fee to put it in place with 100% trail rebated or even a nominal annual amount for misc admin should be cheaper than HL.