Ifa fees/charges

bigadaj

That's Ok so the ifa needs to demonstrate that by moving the pension his charges can be absorbed within the new fees and still lead to a net benefit to the client, that's fine.

MOUNTY

Had my meeting with IFA and the result is;
2% of the value of fund to be transferred and no on going payments as i will managed my funds.
Monthly amc's reduced from 1% ( internal ) to 0.4%.:T

jem16

MOUNTY wrote: »

Monthly amc's reduced from 1% ( internal ) to 0.4%.:T

I thought FL's internal range was 0.7% and with your discount 0.5%.

What funds do you have with Friend's Life and what will you be moving to?

I presume you have seen a cost analysis?

fairleads

mania112 wrote: »

Perhaps I should go on to the 2nd part of this:

Fund projections and past performance are actually not the primary concern when looking at a transfer. This is as per FSA guidelines.

Costs and features trump the performance.

It's obvious why, there's no telling how the fund will perform. How it's performed in the past is no guarantee of the future.

While it may not be a guarantee, it sure as heck is a useful guide

Costs are the most important reason to transfer a pension in my opinion (and in the opinion of the regulator).

Then in the words of my old tech school principle "the book is wrong". The book in this case being the regulator et al

mania112

fairleads wrote: »

Then in the words of my old tech school principle "the book is wrong". The book in this case being the regulator et al

why quote me then change the text when the original quote would be suffice to make your point?

EDIT: And if you think costs should not be the primary reason to justify a transfer, it would be helpful to others to give your opinion on something more prevalent, no?

fairleads

mania112 wrote: »

why quote me then change the text when the original quote would be suffice to make your point?

EDIT: And if you think costs should not be the primary reason to justify a transfer, it would be helpful to others to give your opinion on something more prevalent, no?

Sorry I've upset you.
Re costs. Investing should be outcomes based. Focusing on costs alone while ignoring performance potential is not the best strategy

mania112

fairleads wrote: »

Sorry I've upset you.
Re costs. Investing should be outcomes based. Focusing on costs alone while ignoring performance potential is not the best strategy

You hadn't. Sorry if you thought that you had!

It's not possible (as a regulated individual) to recommend a pension transfer based on potential improved performance.

Sure, you can reference it, but it can't be the reason for a transfer.

Besides, looking at past performance wouldn't be the best way to asses a funds potential anyway. If we're talking an Active Investment Fund I would be much more interested in its Asset Split, Holdings, Fund Size, Fund Managers Strategy, Geography of holdings etc etc etc

dunstonh

It's not possible (as a regulated individual) to recommend a pension transfer based on potential improved performance.

It is but its one that needs to be belt and braces. Typically discrete performance each and every year for the last five years. Not cumulative. The investor has to be one that is knowledgeable enough to understand investments. Last thing you want as an adviser is to do it for someone that doesnt care about investments, doesnt listen to you and is totally disinterested.

bigadaj

Is there a particular point at which it be ones worthwhile for an ifa to be involved purely froma costs/ fee basis? Presumably yes but what fund value would that typically be, difficult to achieve in a passive approach but presumably possible if using active fund management.

mania112

Had an interesting case today which is relevant to this debate:

(i'm a paraplanner.) I was given a factfind for a client who is very cautious, has 2 PPs with a high level of equity, that wanted to consolidate and transfer to lower costs.

Lowering costs is fine, many providers were cheaper.

I then need to select new funds. Due to his ATR I must choose one's which suit that level of risk.

But now, we're recommending him a product which is cheaper but has funds that are more likely to perform at a lower rate than what he had before.

What to do?

... if you're interested, I added a section in the report discussing the above and why we've recommended those funds, hopefully leaving him to suggest he'd prefer a similar asset split to his previous portfolio.

Point is, I can't recommend a high risk portfolio - but I can meet his objective of low costs. Sort of a catch-22.