Charges too high on Self Employed Pension?

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drwster
drwster Posts: 4 Newbie
in Pensions, annuities & retirement planning
Anyone able to give some advice.

I spoke with a FA and got an illustration on a self employed pension. The Illustration appears to point out that i won't make back what i put in?
The reduction in the value of your portfolio mean that the PORTFOLIO AND INVESTMENT CHARGES on your portfolio take the growth rate down after price inflation to 1.2%. This is a reduction in growth of 1.1% a year

It then goes on to say
The reduction in the value of your portfolio means that ALL CHARGES on your portfolio take the growth rate down after price inflation from 2.3% to -0.1%. This is a reduction on growth of 2.4% a year.

Is this just usual illustration speak, or am i getting into a bad investment?

Thanks in advance for any suggestions.

Comments

  • dunstonh
    dunstonh Posts: 116,389 Forumite
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    reduction in yield of 2.4% is too high in 2015.

    The annual appears to be ok but there has to be a large up front fee involved here to turn the reduction in yield on a 1.1% to 2.4% (or a short timescale)
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • drwster
    drwster Posts: 4 Newbie
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    Should i try another FA or should i look for an online product and take that charge out of the question?
  • dunstonh
    dunstonh Posts: 116,389 Forumite
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    You could do either of those.

    Do remember that if you DIY then its important to do your research. Many DIY products are more expensive then IFA products. It can be cheaper if you buy right though.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
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    I pay 0.4% pa in total fees for my investments with Friend's Life.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • drwster
    drwster Posts: 4 Newbie
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    Thanks for the heads up gadgetmind, did you DIY then?
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
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    This is actually on my Group Personal Pension with an IFA chosen by the company in the loop. (But I do DIY for my SIPP and our ISAs.)

    However, you can get pretty close going to FL via Cavendish Online.

    http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/friends-provident1/

    Of course, an IFA can provide a lot more than just a basic personal pension, but this doesn't mean that you need to pay through the nose.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
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    But note that the IFA in my case does the square root of SFA. We choose how much to contribute, what funds to use, and have to do our own calculations regards allowances, etc.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
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