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

buel

atush, let's not be so sensitive eh? Thank you for your post advising me not to post copies of the paperwork (even though I did state that i was planning to leave personal details hidden in my post.

As for thanking others and the heinous crime of not being a true MSR, please see below:

buel wrote: »

Many thanks but that isn't my primary question, my primary question is would the FA have deliberately signed me up before the new rules regarding fees and advice came in to force? And do I stand to lose out regarding any commision he may make now that I would officially be signed up as 'joined and then suspended contributions'?

buel wrote: »

Thank you Jamesd and DunstonH. I really appreciate it.
OK, I have now started this pension.
If I were to post a few scans of the relevant documents (personal details hidden), please could you/someone help me understand some aspects a bit deeper?

buel wrote: »

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.

buel wrote: »

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.

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?)

buel wrote: »

Brilliant, again.
Thank you for educating me.

Hope that helps.

buel

dunstonh wrote: »

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.

Hi Dunstonh,

So are you saying that with a pension provider that charges 1.82%, and a consumer with £100,000 in their GPP who is charged £1,820 per year when their contributions may only be £2000 would not get a better deal by placing this £2000 per year contribution in a bank account?

dunstonh

buel wrote: »

Hi Dunstonh,

So are you saying that with a pension provider that charges 1.82%, and a consumer with £100,000 in their GPP who is charged £1,820 per year when their contributions may only be £2000 would not get a better deal by placing this £2000 per year contribution in a bank account?

correct.

1) bank account wouldnt get employer contributions.
2) bank account wouldnt get tax relief
3) bank account pays the interest after the bank has built its charge into it. This implicit charge can be higher than 1.82%. The bank decides as it goes along. Investment funds disclose their charge which is the same irrespective of return. One charge is explicit. The other is implicit.
4) cash savings are subject to shortfall risk and inflation risk. Investments have investment risk but less risk of shortfall and inflation.

buel

Brilliant!!
Thank you yet again!

atush

atush, let's not be so sensitive eh? Thank you for your post advising me not to post copies of the paperwork (even though I did state that i was planning to leave personal details hidden in my post.

Again you misunderstood me.

I was pointing out to you to Thank the helpful- not with a post, but by clicking the Thanks button under the helpful post. that is what I meant by MSErs.

They 'Thank' people.

I'd start not with me, but Thanking DH's posts.

buel

atush wrote: »

Again you misunderstood me.

I was pointing out to you to Thank the helpful- not with a post, but by clicking the Thanks button under the helpful post. that is what I meant by MSErs.

They 'Thank' people.

I'd start not with me, but Thanking DH's posts.

I am aware of that but my mobile phone will not let me view or click on the 'Thanks' buttons, hence me doing it this morning when I had access to a laptop. I'm all thanked out now.

Thanks atush! :beer:

bigadaj

Linton wrote: »

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.

I dislike this analogy as it smacks of the smoke and mirrors of financial professionals. To be fair to banks, which none of us like to do, I don't care whether they are efficient or have costs, this makes no difference to a quoted rate that I will receive.

Investment returns are subject to additional costs that are frequently not obviously stated, and in the small number of cases where the fund manager, for example, is happy to take some of he risk he wants the gain on top of the base charges, not instead of.

buel

bigadaj wrote: »

I dislike this analogy as it smacks of the smoke and mirrors of financial professionals. To be fair to banks, which none of us like to do, I don't care whether they are efficient or have costs, this makes no difference to a quoted rate that I will receive.

Investment returns are subject to additional costs that are frequently not obviously stated, and in the small number of cases where the fund manager, for example, is happy to take some of he risk he wants the gain on top of the base charges, not instead of.

Now I must say that bigadaj raises a very good point and I would be very, very interested in any further comments on this.

Probably due to my lack of intelligence I'm afraid I still can't get my head around the following:

A charge of £1,820 from an annual contribution of £2000 from a £100,000 fund seems awful.

jamesd

That charge could well be for the fund management, including all costs related to that, the pension provider service (that sells the funds to you) and the IFA service combined. Much of that work isn't really related to how much you're paying in.

However, there are fee-based IFAs and fee-based pension platforms that charge set fees, regardless of the amount invested. For suitably large pension pot sizes those would make more sense than a percentage. The fund would still charge its management charges on percentage basis but at a rate more like 0.75% instead of a typical 1.5% or so for a bundled deal.

GhIFA

On a GPP the AMC (I.e the 1.82%) will include the provider costs, the fund management charges and the adviser remuneration. As I mentioned previously, I think the 1.82% charge is high, but I don't know what funds you are investing in, and this could be adding additional charges on to a lower "base" AMC. It is not unreasonable to work on the assumption that most modern GPP's will come in with a charge of less than 1% at "base", but can differ according to the size of the sponsoring employer and the terms that this enables them to negotiate.

Jamesd makes a valid point on being able to obtain lower charges with fee-based advisers, but this unlikely to be viable with a GPP, as the charges are set at scheme level. To achieve this you would likely need to withdraw from the scheme, which in most cases will mean losing the benefit of the employer contribution.