does ifa really take 50% fee auto enrolement

atush

Or you dont have to use Royal London, use someone else? How long has this employers pension been running? Do they realize the high charges?

There seems to be high charges for this employers fund, esp one who only puts in 1%. when are their contributions rising? They are supposed to rise over time, does she have to pay IFA fees on that as well? What is the amt she must pay in to get the 1%?

Perhaps she should cut back to the min amount to get the employers contribs, then pay in any additional money into a separate personal pension with lower overall charges esp if she is choosing her own funds w/o advice?

stu12345_2

her work use this ifa and fund, so cant get employer contribution if she goes solo elswhere, if she contributes little she pays ifa liitle, but effects total potential growth, so everytime she ups percentage ifa gets 50% for a year, got her by the short and curlies, basically she does 15% and suffers for 12 months, and hopes the contrinbution from her employer compensate these difficult 12 months over next 20 yrs of payments.

addedvaluebob

maximise the contribution outside of the company, she is losing 1% (0.5%) after the ifa has had his cut and against this she is losing 50% of £150. It should be a no-brainer. She does'n't need an ifa to start her own scheme and there are plenty of people on here who will help. Remember she can go back to the scheme in 2016 after the charging level stops.

I do wonder if the ifa is rebating some commission to the employer?

stu12345_2

the charging level for ifas goes from fee based to commission based in 2016 according to royal london. she is 4 moths into scheme already paid 40 to set up scheme 108 total over 12 months and paid300 in ifa cut, even before the 0.5% per year, although its 0.8% charge for the fund with royal london, total 1.3, how that gets to below 1.0 %come april 2015 based on mr osbornes rules, i dont know how it will work.

addedvaluebob

Don't worry about how it will actually pan out in 2016. For the time being she should stop contributing to this scheme and giving the ifa £75 pm for doing nothing. All employees will be informed of the new structure then and she can make a decision at that time

atush

You misunderstood my point. Surely she does not HAVE to pay in 15% to get 1%. How much does she have to pay to get the 1%? I asked this, but you did not answer.

Pay that and no more. The extra up to the 15% she is paying now, can be put into a separate personal pension which will be cheaper as she is getting no advice now, she wont have to pay such high fees thru cavendish etc.

And when will the employers contributions rise? They are supposed to in the future?

Former_MSE_Wendy

Hi Stu12345

Royal London has been in touch with me to say it would be pleased to help clarify things for you, and your wife. You can speak to someone directly on 0845 60 50 401 so do feel free to give them a call.

MSE Wendy

stu12345_2

hi wendy, was hoping this a general advice forum, didnt realise royal london would chat to money saving expert. the royal london advice i got was speak to ifa directly to discuss fees which are outside the pension provider royl london who have their own fees which are reasonable,
the ifa fee is 50% new fund contribution clause, which affects any wages rises or employer/employee increases which ifa can take for a term of 12 months, on top of his 0.5 annual cut for life on plan value

mania112

Under auto-enrolment rules it is not allowed for a financial adviser to take a fee (of any amount) from the members contributions.

This is a statement of fact, so:

a) Check this is a new pension scheme set up under auto-enrolment rules
b) Check that your partner hasn't entered into a private arrangement outside of the auto-enrolment. Has this IFA become your partners IFA?

Under auto-enrolment there is no need for a regulated individual to be involved. This in turn means that the set up of the scheme is an arrangement between the EMPLOYER and the ARRANGER. All fees for the setup of the scheme MUST be paid by the EMPLOYER.

If the member has been told they must pay 50% of their contributions for the setup of their pension, they have been duped and have a case for recourse.

mania112

.....after reading the rest of the thread it seems obvious this pension scheme does not currently fall under the remit of Auto-Enrolment.... so the above fees can be applied, as you've stated them.

I would therefore suggest deferring these payments into an ISA (if that allowance is not currently be utilised) until such time as Auto-Enrolment kicks in for her company.