BBC R4 show on pension advice charges

caronoel

Hello

I heard a show on Radio 4 over the last week or so on the level of pension charges. The query was around high charges being imposed supposedly for a full advice and annual review, and whether such charges were justified.

I've searched on the MoneyBox and You and Yours website but cant find the recording

Could anyone help me?

Thanks

caronoel

Found it!

09:58 here
http://www.bbc.co.uk/programmes/b04lp5c0

dunstonh

Listened to it.

My first observation is that it started with a mistake. It said you may have been mis-sold if you have not had an ongoing service. That is not correct. There is absolutely no requirement to provide ongoing advice. Indeed, most pensions are set up with no ongoing servicing agreement.

It then goes on to mention two recent ombudsman decisions which came about because ongoing advice was not provided. However, in both of these cases, an explicit charge existed (i.e. not commission - even though they called it trail commission) and the agreement was in place that ongoing advice would be provided. When both pension holders went back to the respective companies to get that ongoing advice, both refused to give it (HSBC had pulled out in 2009 from providing ongoing advice but continued to take the charge for ongoing advice). The ombudsman ruled that they did not get the service agreed and the explicit charge should be refunded.

Older pension contracts often gave the adviser the choice to have initial commission or reduced initial (or no initial) but ongoing commission. The method of commission payment would not change the pension charges. Newer pension contracts (such as SIPPs or platform based pensions or post RDR personal pensions (2013 onwards) have the adviser charge explicitly made and there is no commission. The adviser charge is explicit and exists for providing ongoing services. If you are paying ongoing remuneration to the adviser and the adviser refuses to provide an ongoing service then you should complain. The adviser should not refuse to carry out what they agreed and what has been paid for. If you dont want the ongoing service any more you can also get that ongoing remuneration turned off or redirected to a new adviser. If there is no ongoing advice agreement between you and the adviser and its a pre 2013 case then the adviser does not need to provide ongoing advice. If there is an agreement to provide advice, they must do it.

So moneybox sort of got it wrong in how it presented it. However, if you only give it a four minute window of airtime, then that is to be expected.