Cofunds Payments

wary

I have a L&G pension through Cofunds, set up by my IFA a few years ago. It’s a while since I last logged into Cofunds but I now get the message “Cofunds agent id input for the application doesn't exist on the agent standing data.”

Unfortunately the Cofunds website is geared up to ensuring that investors go through their agent and don’t contact them direct, even for such login issues. (The only help they do offer is a password reset, which doesn’t appear to be the cause or solution and I just get a “problem with the page” message when I try.) So presumably I need to get my IFA to resolve it (hopefully without charging me).

Question – I want to make ad hoc payments (maybe monthly) into my policy going forward, independent of my IFA as they’ll likely charge me. How do I do this? Do I need to be able to login online in order to do so?

Thanks.

bigadaj

The question is do you still use your ifa?

If so you need to go through him or remove him as a servicing agent, or transfer to another provider.

It doesn't matter whether you tell him or not about payments as if it's anything but a very new policy then he'll likely get a commission from the provider. I made a lump sum payment to my group scheme that I left a few months ago, so it's now a personal pension. Within the paperwork was a note that the company's adviser had been paid 5% commission though I'd managed the payment and allocation myself. This theoretically shouldn't matter as it comes out of ten or fall charges rather than my actual contribution but it's still a decent sum of money for him for doing precisely sod all.

wary

bigadaj wrote: »

The question is do you still use your ifa?

If so you need to go through him or remove him as a servicing agent, or transfer to another provider.

It doesn't matter whether you tell him or not about payments as if it's anything but a very new policy then he'll likely get a commission from the provider. I made a lump sum payment to my group scheme that I left a few months ago, so it's now a personal pension. Within the paperwork was a note that the company's adviser had been paid 5% commission though I'd managed the payment and allocation myself. This theoretically shouldn't matter as it comes out of ten or fall charges rather than my actual contribution but it's still a decent sum of money for him for doing precisely sod all.

Thanks - some food for thought.

My IFA recently retired (which may explain the login error I'm receiving). The arrangement is that they take 0.5% commission from the AMC each year, and given that the pot is £160K, that will have been £800 this past financial year for doing very little (if anything). (They may have taken an extra 0.5% commission on each ad hoc contribution they've processed too but I've not made any for around 2 years.)

I've so far only had a brief conversation with his replacement by phone, and was advised that if I choose to switch from commission to fee-based, then the AMC would be reduced by 0.5%. How come this commission arrangement is still in place and still allowed? I thought it all had to be fee-based from now on?

With my age and the new pension access rules, I want to ramp up my pension contributions big-style. I'm happy to pay them as appropriate for advice, but it seems like 0.5% of the pot is excessive. I will have a F2F with the new IFA soon, but the more I can go forearmed the better.

In particular, I'll want to make any payments myself as they'll charge me going forward, which in the first instance will mean registering my new LTD company with COFUNDS to confirm that the company contributions are legitimate. Can I do this myself? CONFUNDS' website gives the impression that one has to deal with them via an agent?

bigadaj

If you're a limited company then you can at least claim teh ifa costs as a business expense so reducing the impact.

It may well be that you will need to set up a new scheme with your limited commonly and then transfer the old pension across. There may well be cost involved in this but it does give the opportunity for a new start and hopefully plainer costs, there's no reason why you can't haggle with the ifa for example and speak to others about their costs, unbiased.com is the place to look for alternative IFAs but turn off sponsored ads at the top of the page.

wary

bigadaj wrote: »

If you're a limited company then you can at least claim teh ifa costs as a business expense so reducing the impact.

It may well be that you will need to set up a new scheme with your limited commonly and then transfer the old pension across. There may well be cost involved in this but it does give the opportunity for a new start and hopefully plainer costs, there's no reason why you can't haggle with the ifa for example and speak to others about their costs, unbiased.com is the place to look for alternative IFAs but turn off sponsored ads at the top of the page.

Can one easily swap the service rights of a COFUNDS L&G pension from IFA1 to IFA2 without having to set up a new scheme? (I get the impression with COFUNDS that you have to be linked to an agent.) Is IFA1 entitled to such kind of compensation or transfer fee, especially if they’re still on a commission arrangement, as appears to be so in my case?

Further to this, how come they’re still allowed to take 0.5% of the AMC each year, given that commission is supposedly no longer allowed and it has to be fee-based?

dunstonh

Can one easily swap the service rights of a COFUNDS L&G pension from IFA1 to IFA2 without having to set up a new scheme? (I get the impression with COFUNDS that you have to be linked to an agent.) Is IFA1 entitled to such kind of compensation or transfer fee, especially if they’re still on a commission arrangement, as appears to be so in my case?

Yes. an agency transfer is possible and easy to do. IFA1 would not be able to receive any ongoing remuneration after that.

Further to this, how come they’re still allowed to take 0.5% of the AMC each year, given that commission is supposedly no longer allowed and it has to be fee-based?

Pre RDR contracts can continue to pay commission until there is an event which can cause the commission to be turned off. Although turning commission off doesnt necessarily mean you get the commission. In many cases it is the insurer that gets it instead.

wary

dunstonh wrote: »

Pre RDR contracts can continue to pay commission until there is an event which can cause the commission to be turned off. Although turning commission off doesnt necessarily mean you get the commission. In many cases it is the insurer that gets it instead.

Thanks for that.

Would me requesting to switch to fee-based be such an “event” that would cause commission to be “turned off”?

How would I know before requesting this whether the AMC would indeed be decreased by 0.5% accordingly (the portion paid as IFA commission)? Presumably my IFA can categorically confirm this? … and can I independently verify this? Would the decision re what to do with this 0.5% be taken by the insurer as a whole, or could it vary on a fund-by-fund basis? (I believe I’m invested in 20 funds each with a different charge.)

dunstonh

Would me requesting to switch to fee-based be such an “event” that would cause commission to be “turned off”?

It would do. Although be aware that the fee may actually be more.

if a new IFA is involved, they have to offset the commission against their fee.

Presumably my IFA can categorically confirm this? … and can I independently verify this?

yes and yes. Cofunds verify the remuneration, trail rebate and charges in writing.