does ifa really take 50% fee auto enrolement

stu12345_2

there was a chart showing yearly fees in say 1 yr, 5 yrs, 10 yrs times based on low contributions which increase eg 1 to 3 then 5%, and cost say 10 pounds, 50 pounds 110 pounds
does this make sense, when will fees stop.
advice
she doesnt want to pay 75 a month for 20 yrs, so will it only last 12 months and what does this chart showing fees over next 20 yrs affect her current 15% contribution and this rule banning ifa commission 2016 royal london said

ps she doesnt invest in the default portfolio, she choose her own, so why charged advice fee, she didnt use or even see the ifa when she selected her own portfolio


so this means that 75 a month will stop, but when, she is doing 15% for the next 20 yrs, even ignoring the royal london ifa fee ban, does that mean they cant take 75 a month for 20 yrs, that is very important question

dunstonh

there was a chart showing yearly fees in say 1 yr, 5 yrs, 10 yrs times based on low contributions which increase eg 1 to 3 then 5%, and cost say 10 pounds, 50 pounds 110 pounds

That is all charges. Not just the adviser.

she doesnt want to pay 75 a month for 20 yrs, so will it only last 12 months and what does this chart showing fees over next 20 yrs affect her current 15% contribution and this rule banning ifa commission 2016 royal london said

IFAs are already on fee basis for new business but older schemes set up prior to commission ending have until 2016 to be converted.

ps she doesnt invest in the default portfolio, she choose her own, so why charged advice fee, she didnt use or even see the ifa when she selected her own portfolio

At the moment, the employer has chosen an IFA to administer the scheme and has the employees paying for that rather than the employer paying for it. That will change and something put in its place. Also, the charge cap for annual comes in during April 2015.

stu12345_2

so to sum up, i wish to tell my wife that she wont be paying 75 a month for ever as this would destroy her funds. cheaper putting it in the bank, what do i tell her to advise her

she is happy to pay 0.75% annual fee from april, but not £75 a month for 20 yrs, am i missing something here, as growth without 75 a month would be 40000 aged 65, surely with 75 a month fee, via her 15% contribution would mean total roughly 18000, that cant be right

the growth chart with1.3% fee and contribution of say 3% her and 3% employer adds up projected 18000 also, what am i missing here, sorry for being confused, basically when will this 75 a month stop, is it in 9 months time or 20 yrs, must be 9 months

paying 50 to 100 a yr in fees is ok, as fund still grows, but not 800 a yr as this would destroy pension by 16000 over 20 yrs, surely putting 150 a month in a bank over 20 yrs would be worth at least 17000 over 20 yrs.
surely she cant be paying 16000 in fees over 20 yrs at a 15% contribution rate

can someone give a clear answer, will it stop in 9 months, if not and her workmates also pay 15% also over next 20 yrs, then that means the ifa could earn £180,000 or more, that cant be possible, can it, just for arranging a pension

dunstonh

she is happy to pay 0.75% annual fee from april, but not £75 a month for 20 yrs

Where are you getting this £75pm for 20 years from?

hen that means the ifa could earn £180,000 or more, that cant be possible

Correct. it is not possible as already stated earlier on this thread.

stu12345_2

ok, so 50% fee of her monthly contribution should stop in 9 months time, and after that the full 150 a month should go to growth less the 1.3% fee of fund total for fund charge from royal london,

the £75 is the 50% charge of her 15% ( £150) monthly contribution she has been making for last 3 months out her wages that is leaving her fund. hence only 7.5% actually goes to potential growth,so in same way if her workmates contribute 1%, then only 0.5% goes to growth for first 12 months, is that right,

sorry if i seem confused but paying in 150 a month and 75 deducted seems like a 50% loss on pension, every month--- CAN YOU EXPLAIN HOW IT IS NOT, THANKS

SO BASICALLY EVERYONE PAYS A 50% FEE FOR FIRST 12 MONTHS INSTEAD OF FIXED FEE, IF YOU PAY LARGE CONTRIBUTION YOU PAY MORE CASH, BUT THE PERCENTAGE OVERALL IS THE SAME, COMPARED TO TOTAL COST FOR SOMEONE CONTRIBUTING LOW %, STILL GET A 50% CHARGE FOR 12 MONTHS.

im just confused compared to my dc auto enrolement pension, when i pay in 150 a month, 150 goes into pot less 0.8% value of fund. i pay 15% also, not the £75 deduction as with my wifes.

can i ask another question if say at 55 your fund is say 20% cash, and 80% bonds, on a funds of say 40000 , and you wish to withdraw say 5000 a year, how does that work if the bond is paying out a divident of 1000 a year, what happens.or does full fund need to avoid bonds as its a fixed amount per yr they pay. and be 100% cash or a mix of cash and growth equities, but not divident equities, if you need to access more than the divident on bond or equity income

stu12345_2

Initial Financial Adviser's Fee charges
These charges cover the costs of initial payments to your financial adviser for services in relation to your plan.
Regular contributions: 12 monthly charges of £9.04
We will take the first charge on 30 September 2014. We will take the
remaining monthly charges from 31 October 2014.
Regular contribution increase: If your regular contributions increase because of a change in your
pensionable salary, or as a result of the contribution structure, we will make
further charges over 12 months from the date of each contribution increase.
The amount of each monthly charge will be 50.00% of the increase in yearly
contribution divided by 12.
Changes to charges
If you make any change which alters the charges on your plan we will let you know. In some circumstances we may alter

stu12345_2

Initial Financial Adviser's Fee charges
These charges cover the costs of initial payments to your financial adviser for services in relation to your plan.
Regular contributions: 12 monthly charges of £9.04
We will take the first charge on 30 September 2014. We will take the
remaining monthly charges from 31 October 2014.
Regular contribution increase: If your regular contributions increase because of a change in your
pensionable salary, or as a result of the contribution structure, we will make
further charges over 12 months from the date of each contribution increase.
The amount of each monthly charge will be 50.00% of the increase in yearly
contribution divided by 12.
Changes to charges
If you make any change which alters the charges on your plan we will let you know. In some circumstances we may alter

DOES THIS MEAN IF NEXT TIME WIFE GETS PAY RISE,IN 2016, THE IFA WILL TAKE 50% OF THE EXTRA CONTRIBUTION SHE MAKES. AS SHE WILL SET CONTRIBUTION AT 15%,FOR 20 YEARS, BUT HER EMPLOYER GOES TO 3% IN 2017, WILL THIS ALSO CAUSE A 50% CHARGE FOR THE YEAR 2017 AND IS IT 50% OF THE DIFF OF 1% AND 3% HER EMPLOYER MAKES FOR A 12 MONTH PERIOD

addedvaluebob

This level of fee is absolutely outrageous given that the IFA has done nothing more than complete a form. This is an old style scheme and the ifa is clearly making hay until the sun shops shining in 2016.

The whole point of pensions modernisation and auto enrolment reform was to stop people getting ripped off when contributing to a pension scheme. She would be better off going it alone and forgoing the employer 1% contribution. She will still get tax relief and the charges will be significantly less than the adviser 50% of the first years contribution or any increase, she can return to the scheme in 2016 when hopefully it will have a fairer charging structure.

An advice fee of £1,080 (£864 after tax relief) complete rip off and totally indefensible

stu12345_2

spoke to royal london, they say either freeze pension now till 55 or pay a sipp but via an ifa so more costs or haggle direct with the ifa that set up the worplace pension to scrap future fees, help, dont fancing haggling as each member of staff needs to haggle direct, therefor maybe unfair on those that dont contact the ifa to haggle.

Thrugelmir

stu12345 wrote: »

dont fancing haggling as each member of staff needs to haggle direct, therefor maybe unfair on those that dont contact the ifa to haggle.

Call a staff meeting. I'm sure there'll be a couple of people competent to represent you all. After all the employer themselves may not be any wiser.