F.A. included me in Pension w/o my permission.

GhIFA

It's difficult to answer exactly as we don't know the basis on which the scheme has been set up. The assumption is being made that this is a Group Personal Pension (GPP), and the experience of the schemes I have been involved with would be that this is taken as a percentage of the fund value. The exact details of how and when this is taken will depend upon the scheme terms.

The AMC is would generally be charged by the Pension Provider, not the FA (particularly as you say in this case that he is not taking any ongoing remuneration).

Again, can't comment on the specifics of this particular scheme, but in my experience that would seem a high level of charge for a GPP, unless you are investing in "externally" managed funds (for which there tends to be additional charges) rather than the provider's own funds.

buel

Thank you so much for this, I really appreciate it. I will go ahead and post the particular page later (with the personal information blanked) as I really do find it all so interesting and would like to know/understand as much as I can about my pension.
Just one more thing- If the AMC is taken by the FA, will I ever be in a position to 'switch' FA's to one that does not charge such a high percentage?
It is a GPP.

GhIFA

The AMC will be taken by the pension scheme provider, not the FA. Again, it's difficult to be definitive as different schemes have different terms, but the adviser classified as the servicing adviser will, in most cases, be applied at scheme level (you are not the pension provider's client, your employer is and therefore they will instruct who the adviser is). Therefore, if you appoint your own adviser to review your own policy in the scheme, it is likely that you would have to pay them directly for this service, and it won't make any difference to the AMC that applies to your fund.

buel

Thank you very much for your help.
Just for confirmation, I will try to find out for sure.
It just seems awfully harsh that someone who has, say, £100,000 in their GPP is charged £1,820 per year when their contributions may only be 2K or just over.

dunstonh

1. The paperwork says that the FA will charge an AMC of 1.82%. Will this always be the percentage of the fund and never out of, say, the amount invested?

The AMC equates to a TER on a unit trust. So, that gives you an idea of benchmark. The IFA is paid out of that but it will include fund and provider as well.

It also suggests that the funds are not internal funds but external (external cost more)

Just one more thing- If the AMC is taken by the FA, will I ever be in a position to 'switch' FA's to one that does not charge such a high percentage?
It is a GPP.

Not unless you leave the scheme. The IFA is contracted by the employer on group schemes. The charges are agreed by the employer. The 1.82% wont be going to the IFA though. There will be something in there going to the IFA (and it should be disclosed on the illustrations) but not all that.

dunstonh

It just seems awfully harsh that someone who has, say, £100,000 in their GPP is charged £1,820 per year when their contributions may only be 2K or just over.

They still have £100k invested though. If you put £100k in a savings account then the charge is similar. Only difference is that with one you told it, the other you are not. No-one is in business for love.

buel

Brilliant! Thank you, as usual DunstonH.
(due to my naivety, I don't understand who you would be charged on a savings account?)

Linton

buel wrote: »

Brilliant! Thank you, as usual DunstonH.
(due to my naivety, I don't understand who you would be charged on a savings account?)

If who means how, by getting a lower rate of interest than would be the case if the bank didnt have to pay its staff, run its computers, maintain the branch network etc etc.

Similarly with pensions you get a lower return than would be the case if everyone involved worked for nothing.

buel

Brilliant, again.
Thank you for educating me.

atush

buel wrote: »

I see your point.
OK, two questions, If I may-
1. The paperwork says that the FA will charge an AMC of 1.82%. Will this always be the percentage of the fund and never out of, say, the amount invested?
2. Is this a low, medium or high charge, please?

If you see my point, that I was trying to help you not fall victim to identity fraud and other dangers, a thanks would have been nice. Not just to me, either.

you seem to not be NOT a true MSEr