Advisors and pension dompanies

Treesie

Does anyone have any experience of Lighthouse group as an IFA and Royal London Group as a pension company? We have been advised to move our pensions to a Royal London Governed portfolio. I had thought Royal London was more of an insurance group.

Good_bad_and_ugly

If you have over 30k or so, Royal London is a good proposition to consider. Consider the Pension Portfolio to keep costs down. How much will the transfer cost you?

Treesie

Thanks. They are wanting £5500 for the transfer, 0.5% RL charge pa which is discounted and 0.5% Lighthouse fee pa.

philwal_2

5500 that seems very expensive for an adviser charge what is the size of the pot is it a defined contribution plan or defined benefit plan you are being advised to move. Royal London are a pension specialist company.

Treesie

The pot is Cora £140k. Its currently a private pension pot which is now a zombie fund. My thoughts re Lighthouse. Is it a case of this is good for now then in a couple of years they are advising something else for another fee.

They won't scrub the fee, they want half each.

philwal_2

The royal London plan will offer full flexibility and once there I would not think it would be necessary for you to move the pot again in the future. Your main concern would be why they are charging in the region of 4% to carry out this work. It may be worthwhile speaking to another ifa and see what their costs would be.

Good_bad_and_ugly

Treesie,

So, roughly, 4% for the paperwork?! This isn't advising, this is depravity. You say 'we', have they been bought in by your employer?

If they are suggesting your existing funds are no good, ask them why. Ask them if they can switch funds with the existing provider.

Lighthouse is a chain, it's a business - and you're the product.

Treesie

Yes, that's about it. 'We' as in my partner and I.
Lighthouse say that as the curent pension is speculative it's too volatile for our current risk style.
To be honest, looking at Trustnet, the current provider (Abbey Life) do not have a good track record. Although Lighthouse say they can offer many different products, they have only suggested this governed pension. When I questioned this further, they suggested other governed portfolios still with Royal London.
I'm beginning to think you are spot on. I do run a SIPP With YouInvest but didn't want all my eggs in one basket.

Good_bad_and_ugly

Find an adviser that charges a fixed fee. If the fund is volatile and speculative, ask why they don't do a fund switch into something more risk averse within Abbey Life. Don't get me wrong, I like Royal London - a lot. But if I were you, I don't think it's worth the thick end of £5.5k.

Abbey Life might not be much cop but ask them what the reduction in yield is going to be as a result taking into account your new funds compared to the price of the old. Then ask if the new funds can leap that hurdle. Is a slightly poorly performing Abbey Life still better than an expensive Royal London?

Sorry, but it sounds like typical lazy advising. A good adviser will do it for a few hundred quid if he wants your ongoing business. If you give these guys £5.5k upfront, then 0.5% on 140k on an ongoing basis is small change by comparison.

philwal_2

My dad had an old protected rights pension with abbey life recently which was moved to Scottish widows purely on a cost basis he pays 0.38 per annum in charges and is invested in their pension portfolio range of funds.

If you are confident of investing the funds yourself you would be silly to pay the 5500 adviser fee

Treesie

Thanks guys, very interesting replies. As part of the financial overhaul many IFAs are now charging for an initial report and conclsion, in this case £575. Finding a decent IFA seems to be one heck of a difficult job.

Phil, I feel fairly confident in investing but I'm not a pro. I think I need to do a bit more research on fund research, risk, how often to rebalance etc.