Pension help - IFA question

degsygordon

Hi,

I am currently part of a company group personal pension schema which is with one of the major companies(ScotEq). We have been informed that the scheme is no long being offered due to a number of reasons
and we are therefore switching over to another group of companies (Standard Life, Scottish Widows, etc).

My funds are performing relatively okay compared with those offers by the other competitors, and would therefore like to stay put.

Trouble is, I find it hard paying into a fund which is pretty much managed by myself anyway only to find that the IFA is getting there cut.

I have been informed that it is possible to by-pass an IFA and have a direct persion with the company. Is anyone doing this? Is it easy to do? I take it you save on all the commission that the pension company has to pay out to your IFA? Does this mean your fund performs better on the longer term??

Any help appreciated.

Thanks,
Derek

EdInvestor

Hi Derek

degsygordon wrote:

I have been informed that it is possible to by-pass an IFA and have a direct persion with the company. Is anyone doing this? Is it easy to do? I take it you save on all the commission that the pension company has to pay out to your IFA? Does this mean your fund performs better on the longer term??

You can instruct the life company to stop paying any commission to the IFA noted on your policy if he doesn't advise you any more.But the life company will just pocket the money itself, not give it to you.:(

A discount broker who will rebate the commission to you is a better bet if you don;t need advice: I see that MSE recommends Cavendish for a stakeholder pension, so they might be worth contacting.

dunstonh

It should also be noted that a number of insurers have an IFA product which is superior to the direct product or will only offer their product through an IFA.

When going direct, the insurance company oftens keeps the charges the same and keeps all the profit for themselves. You shouldnt also assume that the IFA product is going to be more expensive than a direct stakeholder. A number of IFA arranged pensions can have a reduction in yield of upto 0.7% per annum better than a stakeholder.

The "discount brokers" mentioned are IFAs themselves so you would be getting the IFA product.