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can't transfer without a financial advisor

elantan
elantan Posts: 21,022 Forumite
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Hi all,

Wish this board had a sticky for asking quick questions

I'm looking to transfer some money from a SIPP to a personal pension, its not a lot of money £7,500 in vanguard LS ... i know it isn't the best place to keep it but i quite liked the idea of having vanguard in a pension wrapper, as its for the long term etc.

Ive had this with H&L for a while and i sucked up the £2 a month fees but now i am going to be paying more i think it is time to transfer it to my personal pension with Aegon. Phoned Aegon but they only accept transfers from an IFA so i cant do it without one :(

so i have phoned my old independent financial advisor and the guy seemed quite helpful, he has informed me it is 3% to transfer it into my private pension... this will turn out to be £225, now compare that to the H&L fees of £35 a year it would take me 6.4 years to break even on charges ( if i never paid anymore into my H&L vanguard)

He has also stated that he can help me with S&S I.S.A's which would be handy .... but i am small fry, i really am, i will only be investing £250 a month into an ISA and £200 plus 20% of any overtime into a pension so not much at all.

Before i make yet another Mistake, can anyone tell me does this sound ok? or am i being once again stupid ?

Thanks In Advance
«13

Comments

  • dunstonh
    dunstonh Posts: 118,565 Forumite
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    Ive had this with H&L for a while and i sucked up the £2 a month fees but now i am going to be paying more i think it is time to transfer it to my personal pension with Aegon. Phoned Aegon but they only accept transfers from an IFA so i cant do it without one

    Aegon do not retail direct to public. They need an intermediary (not necessarily an IFA) to do the transfer.

    Personal pensions are certainly going to be a better option than the HL SIPP for many people. So, the concept sounds ok. Your fund value is not SIPP territory and the value doesnt warrant anything special fund wise. SO, again, internal insurance company funds should offer better value.

    Maybe via Cavendish is your best option here.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • elantan
    elantan Posts: 21,022 Forumite
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    edited 15 January 2014 pm31 6:28PM
    thanks Dunstonh, :)

    i wasnt aware that i could get Cavendish to do this for me i was under the impression it had to be an independent financial advisor, will look into cavendish and see how i would go about it ...

    Thanks

    just to check ... is this the one you mean

    http://www.cavendishonline.co.uk/pensions/personal-pensions/

    that would work out at £70 instead of the £225, thats quite a big saving :)

    i wish i had seen this before, i never knew that Cavendish did personal pensions, with companies, i thought it was just S.I.P.Ps the same as H&L
  • dunstonh
    dunstonh Posts: 118,565 Forumite
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    i wasnt aware that i could get Cavendish to do this for me i was under the impression it had to be an independent financial advisor, will look into cavendish and see how i would go about it ...

    It can be any intermediary with FSA permissions and an agency with Aegon operating within their permissions. IFA is just one of the types that fall under that.
    just to check ... is this the one you mean

    That is one of the Aegon pensions and generically fits what you are referring to but I cannot say any more than that.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • elantan
    elantan Posts: 21,022 Forumite
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    i fully understand Dunstonh ... was just not sure if it was the right link :)

    Thanks very much again really appreciate all the help you've given me over the years
  • elantan
    elantan Posts: 21,022 Forumite
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    edited 17 January 2014 pm31 8:13PM
    so today was the day for my appointment with the IFA, i went along anyway as maybe what he proposes might be the right thing for me compared to me doing the work, i'm also aware that I.F.A's can have access to things that i maybe wouldnt, and that he may be able to suggest a way which meets my needs better.

    Gentlemen was very nice, however, a few things became apparent during our meeting, last time i was visited them they set up a personal pension for myself i obviously went through the whole risk adverse assessment etc and was advised to put my pension contributions into a certain pension product..... today the gentlemen had a print out of the fund that i have, he mentioned one of them which stood at a profit of 49.26% since 2006 and the other pension of 5.44% profit since 2006 also, i pointed out to him that the one that was at 49.26% was in fact the one that i had frozen by my old company and that they had told me that it was best left where it was to do what it was doing so they didnt in fact have anything to do with it, the product that they suggested to me and that i took out was the one that only made 5.44% profit since 2006...

    now i dont blame them in anyway for this, they suggested the fund i was the one that took them at their word and went with their advice and agreed to that fund, but it does make me wonder if i would have been better off having my own S.I.P.P from the beginning, would i be better off just dealing with it all myself? for example i recently changed one of my funds in my SI.P.P when it had reached 25% profit ... now i know very little about funds etc ( as is plainly obvious) but if i can make 25% profit by myself compared to someone in the know advising me and i make 5.44% then surely there is some discrepancy going on ?

    as i say i dont blame them it was my choice and my responsibility to make sure it was achieving what i was looking for, but it was a bit of an eye opener for me today, the gentlemen has the details he needs and will get back to me soon with his advice, i will be much more involved in the process compared to last time, last time i knew nothing at all about pensions except that i needed one and wanted someone that dealt in pensions to advise me.. this time i know a wee bit more, so i may be moving this pension as well as sorting the S.I.P.P out

    Another question if anyone can help me please

    my frozen pension
    in 2009 it was valued at £7,816.34 with a yearly pension of £746
    in 2011 it was valued at £8,073.69 with a yearly pension of £681
    in 2012 it was valued at £9,097.99 with a yearly pension of £440
    in 2013 it was valued at £10,082.70 with a yearly pension of £305

    now i fully understand that the way things used to be calculated was wrong and things needed to change ... i get that ... but i thought that was all sorted out a few years ago now ... why am i still losing money every year on the pay out of a pension?

    What am i not understanding ?

    sorry to go on and on about it but i am trying to learn and figure out whats right for my retirement and i dont know where else i can find this information from

    thanks once again in advance
  • Linton
    Linton Posts: 17,929 Forumite
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    Different fund returns.

    Between 2006 and now there has been a little matter of the credit crunch crash when many funds dropped by as much as 50%. Since then there has been a large recovery, but different funds investing in different things will have behaved in different ways. Your 25% and the advisors 5% for individual funds are unlikely to be a matter of investment skill on your part or of incompetence on his. Its far more likely that conditions in the past few years have been more favourable to the sort of things your fund invests in. And of course conditions in the past few years have in general been far more favourable to investors than in the years around the crash.

    If you told us what the funds are I could comment further.


    Changed pension examples:
    Annuity rates have fallen though not by anything that large in so short a time, and they increasing now. What I suspect is going on is that the example figures are calculated on a different basis - eg fixed rate or inflation linked annuities, different assumed investment returns, and also whether they are at current prices or estimated future prices. If you have the paperwork I suggest you look at the assumptions associated with each example calculation.
  • elantan
    elantan Posts: 21,022 Forumite
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    edited 17 January 2014 pm31 8:41PM
    Linton wrote: »
    Different fund returns.

    Between 2006 and now there has been a little matter of the credit crunch crash when many funds dropped by as much as 50%. Since then there has been a large recovery, but different funds investing in different things will have behaved in different ways. Your 25% and the advisors 5% for individual funds are unlikely to be a matter of investment skill on your part or of incompetence on his. Its far more likely that conditions in the past few years have been more favourable to the sort of things your fund invests in. And of course conditions in the past few years have in general been far more favourable to investors than in the years around the crash.

    If you told us what the funds are I could comment further.


    Changed pension examples:
    Annuity rates have fallen though not by anything that large in so short a time, and they increasing now. What I suspect is going on is that the example figures are calculated on a different basis - eg fixed rate or inflation linked annuities, different assumed investment returns, and also whether they are at current prices or estimated future prices. If you have the paperwork I suggest you look at the assumptions associated with each example calculation.

    Thanks Linton, as i say i dont blame the financial adviser in anyway at all tbh ... and i know things were tough there for a long while and have only really started recovering... the fund the 5.44 % one is invested in is Aegon's 50/50 caut man coll fund, the other one was my invesco perpetual Uk equity pension ...

    am looking at the assumptions just now and all i can see is it is based on a set of standard assumptions required by law, it is saying in todays money it could be worth the above amounts but thats it so far, i cant find anything about fixed rate or inflation so far but will have a more closer look ...
  • elantan
    elantan Posts: 21,022 Forumite
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    edited 17 January 2014 pm31 9:08PM
    Ohhh hold on way way way down on the back page it has said it's assuming a 7% growth ( it's been nearly that if I have worked it out right ) and a 2.5% rate of inflation

    Would that make much difference ?
  • Linton
    Linton Posts: 17,929 Forumite
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    elantan wrote: »
    Thanks Linton, as i say i dont blame the financial adviser in anyway at all tbh ... and i know things were tough there for a long while and have only really started recovering... the fund the 5.44 % one is invested in is Aegon's 50/50 caut man coll fund, the other one was my invesco perpetual Uk equity pension ...

    am looking at the assumptions just now and all i can see is it is based on a set of standard assumptions required by law, it is saying in todays money it could be worth the above amounts but thats it so far, i cant find anything about fixed rate or inflation so far but will have a more closer look ...

    Are you sure the 5.44% one isnt 5.44% per year? According to Trustnet the 50/50 fund has approximately increased in value by 50% since mid 2006 which would tie in with a 5.4% annual increase. That or you are paying extremely high charges!

    This and the UK Equity fund are very different funds. The 50/50 fund is 50% in bonds rather than shares, it has been performing at pretty much the average for such funds.

    On assumptions - yes pension examples have to be on a standard basis, but the standard has changed over the years.
  • elantan
    elantan Posts: 21,022 Forumite
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    edited 17 January 2014 pm31 9:35PM
    According to the paperwork in front of me right now it is stating the Aegon 50/50 one has grown at 5.44% with a 1.29% growth rate per annum ... which in a way doesnt make sense as 1.29% x 7 years is more than 5.44 %

    just to double check this is the Scot eq 50/50 caut mgd collec pn sc ... dont know what the pn sc means but its with Aegon

    if thats the same account that you have then there is deff a discrepancy as it deff states here 5.44% total growth with a 1.29% per annum ( i cant quite figure out how that works though)

    my fund management charge for the fund is 1% ... i'm assuming this is standard ? there is an asterix next to the 1.00% AMC bit that states, this fund had an additional charge, but there is nothing on my statement to say what that charge is , so i had phoned them the other month and asked ... i was told it is an additional .15% ... taking my AMC to 1.15% per annum ... i would be better staying with H&L at that rate...

    i wasnt really thinking that the equity one that i had was anything other than luck tbh as i know i am not skilled in picking funds etc . i was just merley thinking along the lines of comparison with going it alone and seeing someone to help me out ... as i say though i do not in anyway shape or form blame the IFA i know how good a job IFA's can do ... and i know they can only go with what a person tells them...
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