Scottish Widows pension & IFA

redmalc

I am very uneasy with my IFA at the moment because i am unable to grasp what he is trying to do.
I have had a pension for some time with SCottish Widows and i pay around £300 per month and it has done very well,since
February is as increased from 118K to 133K however he is wanting me to close it down and transfer to a different Scottish Widows product which he advises has a better choice of funds available.
I note also he as sent me a form to agree his fees at 0.2% per month and a seperate form which is 0.5% on my other investments which are approx 250K and 1% for any new money invested.
I am not after any arguments with IFA,s but are these fees around the average,i have not heard from my guy for over a year,he does not do a lot for me so i am deciding wether or not to say enough is enough,i have never met him in 18 years.

dunstonh

February is as increased from 118K to 133K however he is wanting me to close it down and transfer to a different Scottish Widows product which he advises has a better choice of funds available.

Not an uncommon scenario as the old Scot Wid range has got long in the tooth. For example, it used to be a good PPP but now it just looks obsolete and expensive compared to others. The newer SW version is better.

I

am not after any arguments with IFA,s but are these fees around the average

0.5% ongoing is most common (typically more for smaller values). 1% initial is also common and typically good value as long as there is a cap.

You are focusing on the IFA charge. Focus on what the new contract does that is better. If the IFA is earning the same but you are going to pay less than that is important. If you are going to get the real UT/OEIC fund instead of a mirror fund then that is important.

atush

fees at .2% per month isn't high? That is 2.4% in addition to the other fees?

dunstonh

In my response, I had assumed it mean 0.2% p.a. but collected monthly. If it is 0.20% pm then there is no justification for that. Although I dont know many companies that would facilitate a charge that high.

I did start typing this before but it got cut off with just the "I" appearing.... I do not like the idea of charging different amounts for different tax wrappers. Although that would actually mean the charge would be higher (assuming 0.2% p.a). I prefer the cost to be the same irrespective of wrapper, provider or product. Indeed, I am not sure charging different amounts for different tax wrappers is actually compliant.

jamesd

0.2% a month is high. Is the 0.5% monthly or annual (if monthly the IFA would get a portion pro rata each month anyway).

You've enough money there to get better pricing by shopping around and/or by paying a flat fee for annual reviews instead of a percentage. £380k in total assets is quite worthwhile for an IFA and it looks as though this one is after £1,250 from the non-pension part a year, plus 1% of new money, plus £3,192 a year from the pension part.

If you're in a high cost area like London the fees make a bit more sense but if you don't meet the IFA at all an IFA like some of those who post here might be interested in the business and some of those would probably be happy to have your business. The forum rules prohibit them from contacting you first, if you are interested in this you should send them a private message pointing to this discussion and asking if they are potentially interested. You can also visit unbiased.co.uk and look for more local IFAs or FAs that way.

DIY platforms, without advice, are available at around 0.75% for managed fund investments plus a platform fee in the £50-150 range a year. Less for tracker funds. Some with dealing charges for funds, some not. The "for the investments" part is what we don't know about the costs of the deal your IFA is proposing.

sandsy

If 0.2%pm=2.4%pa, that's very high!

It's important to know what service you will get for your monthly/annual charge. You said he hadn't done much for you previously - it's now a requirement that when an adviser makes a specific ongoing charge, you are clear on what you are getting and paying for. You also have the right to stop receiving that service at any time and cancel future charges.

redmalc

Thanks for the responses,the IFA is in London but I live in Nottingham,
I was of the opinion the 0.2% per month was a bit high,i will be looking for a new advisor,any recommendations welcome please

Aegis

redmalc wrote: »

Thanks for the responses,the IFA is in London but I live in Nottingham,
I was of the opinion the 0.2% per month was a bit high,i will be looking for a new advisor,any recommendations welcome please

Is it definitely 0.2% per month? That would be ridiculously high - far higher than any other IFA I've heard of. It might be wporth asking him to detail his fees in both annual percentage terms and monetary terms. The FCA has stated for some time that fees should be presented in cash terms to make it easier to understand, so find out if the annual charge on your pension is closer to £266 (0.2%) or £3,192 (2.4%). If the latter, move away before signing anything.

redmalc

Aegis i have just e mailed him to enquire if it is a typo,i will advise after the response i receive. I will smell a rat if he claims a typo given the number of mails I have received requesting the paperwork being returned.
I am unsure if I really need him, his input has been minimal over the years, I have done the majority of switching myself over the years within my HL/Skandia and Fidelity Investments, he as given me a bit of advice on the pension two years ago when he switched me from Clerical Medical to Scottish Widows but I noticed later he got £4100 in fees.
I will definitely need advice in a few years with retirement planning and the various options involved.

atush

I would find a good local one near to you via unbiased.co.uk

redmalc

Hi Guys
I have been advised it was a typo