Private pension transfer via Cavendish Online

WoB

Hi

I have a private pension through Scottish Widows. This was previously a company pension scheme, which (after redundancy) I now pay directly to retaining a 0.7% AMC.

The pension adviser has not been in touch with me for any annual review since this switch (approx 2 years ago) despite previously having 6 month reviews through my old company.

I now have my own limited company and I'm looking to pay directly from the company bank account into a new private pension. I am thinking of setting this up myself via Cavendish Online (possibly using Scottish life).

The change in frequency of contact with the pension adviser has annoyed me somewhat. I read about the financial rule changes around commissions/up front fee's - I'm just wondering if this has had any bearing on the situation? Anyway, I am looking at cutting my costs as much as possible and the 0.4% AMC via Cavendish is appealing, along with the small set up fee.

Does this seem reasonable? I also am thinking of transferring the Scottish Widows pot into the new pension. Do I need the previous adviser involved in this transfer or can I do it all via Cavendish/Scottish Life.

Any opinions on the pension providers used by Cavendish? I don't know a lot about specific funds but will probably use the risk assessment guides provided to select.

Appreciate any thoughts and answers to the transfer query.

Cheers
WoB

dunstonh

The pension adviser has not been in touch with me for any annual review since this switch (approx 2 years ago) despite previously having 6 month reviews through my old company.

Probably as they are paid for by the employer and you are not with them any more.

I read about the financial rule changes around commissions/up front fee's - I'm just wondering if this has had any bearing on the situation?

As you are now in business, you will know that you do work for people that pay you.

Do I need the previous adviser involved in this transfer or can I do it all via Cavendish/Scottish Life.

You dont need the original intermediary.

WoB

I appreciate the adviser needs paying but assumed he'd still be managing my funds and the payment would come from me instead of the company. I thought maybe it was beneficial to him not to have the funds changed and still benefit from any commission based agreement in place prior to these rules changes? I don't know if that happens anyway?

I don't truly understand how the adviser makes money anyway. I just find it odd there has been no contact, even to say 'if you want to discuss your funds it will be £xxx now). It's like I've disappeared off the face of the earth! And to think we had a decent relationship prior to this....

Thanks for the info anyway.

dunstonh

I appreciate the adviser needs paying but assumed he'd still be managing my funds and the payment would come from me instead of the company.

A possible option. However, maybe your pension isnt big enough for it to be on a servicing contract when its no longer benefitting from the cross subsidy of the main scheme.

Maybe the adviser has retired. Maybe they have changed their business model following the retail distribution review in January 2013. We can only guess. If you ask the adviser, you may find out why.

WoB

Yes, I guess I really should ask (they haven't retired)! :-) Any views on the pension providers offered via Cavendish? Or are they all reasonable enough?

dunstonh

Any views on the pension providers offered via Cavendish?

As an adviser, it would be wrong for me to comment. However, they are a limited panel containing the mainstream providers.

bigadaj

WoB wrote: »

Yes, I guess I really should ask (they haven't retired)! :-) Any views on the pension providers offered via Cavendish? Or are they all reasonable enough?

Dunstonh is obviously constrained as an adviser but I'm not so can comment a little more freely.

Cavendish just provide a portal to allow you to access pensions from many of the big insurers and fund houses, and avoiding advice you get generally lower fees.

There is now little difference in what you invest in between an isa and a pension, just choose your risk profile, asset allocation and place into suitable funds. If you manage your own isas then it's pretty much the same, if not then you need to do seem reading up and then come back for a sense check maybe.

WoB

Appreciate your position dunstonh - thanks for the response to other questions.

bigadaj - I only have Cash ISA's so not dabbled with S&S ISA's. I am aware of risk-profiling and the general ability to choose funds based on this etc. I don't know the intricacies of this but assumed in-depth knowledge wasn't required if investing this way (rather than actually selecting specific funds).

What alternatives are there to Cavendish? Are the providers they offer much of a muchness? Any more highly rated? eg. Scottish Life?

Sorry for the newbie questions. I want to take advantage of being able to contribute pre-tax and reduced fees. I will do some more reading on the funds but imagine I'd match something similar to what I have with Scottish Widows (medium risk).

Any thoughts on transferring the pot from here to a new provider? Would it be less risky to keep it where it is? And have another pot with a new provider?

bigadaj

There's probably not much between the big companies, it's just a case of looking at costs and preferences really. The different companies contain similar funds so it's your choices of teh funds you invest in, rather than the managing company that can make a difference in your return.

The problem is that it actually takes a bit of effort to get the really low fees advertised whilst keeping it simple and diversified. To do that you'd want either a diversified tracker such as vanguard lifestrategy or black rock consensus and such funds are often not included with personal pensions. So to keep things easy you invest in teh insurers balanced managed fund or similar and the costs then are often back up around the 0.7% you're already paying?by ou can get chepaper but your buying different tracker funds and then Checking yourself to rebalance etc.

WoB

Many thanks for the info and taking the time to respond. Certainly something to chew on. I think I have a bit of research to do! :rotfl:

dunstonh

To do that you'd want either a diversified tracker such as vanguard lifestrategy or black rock consensus and such funds are often not included with personal pensions.

Part of the problem with those funds is that they cease to be low cost compared to the in-house funds and the performance of those in-house funds is often comparable or better than VLS.

VLS would cost around 0.7% but the in house funds can get as low as 0.35% (although 0.40% is the most common figure on 20k plus funds)