Cost to transfer pension

weezie7

dunstonh@
Thanks for all that.


On 'Illustration' documents from Royal London it does specify £ and %. I do not have a copy of what I signed with IFA, but he only told me % as one off fee. I will follow that up with him. I just have to be brave and confront him, via a phone call!


I will comment on the fact that he didn't specify £ to him, and ask for a reduction from 2.25% and see what happens!


Many thanks, will let you know what happens.


Wish me luck in the morning!

mania112

Sounds right, the default cost to Royal London is 1% but they offer discounts based on fund sizes and this will make your plan 0.4%

the illustration will also show adviser fees, so you should see that on the document you have

weezie7

dunstonh and mania112


No luck with negotiating the 2.25% down. The paperwork is 'too far down the line' apparently! I have thought about the 30 day pulling out clause, but do want the pension package.


The charges by Royal London are discounted to 0.4%, but the IFA charges are still 1% on top of that.


He will negotiate in the future for S&S ISA's that I have apparently! I do feel he wants to get his hands on these as he made 'derogatory' comments about who they are with at present.


Mania112 - What advice or reviews specifically should I be looking for in regards to the funds, as he indicated they might be moved around in future?

Al.

Has the transfer actually taken place yet?

If not, it's certainly not too far down the line. I like Royal London, it's a great product and the Governed Portfolios are superbly run. The transparency of the Investment Committee is second to none.

Has a transfer analysis been prepared; does it show what the reduction in yield is going to be (ie; the hurdle that your funds are now going to have to leap to simply compensate for the 2.5% and the ongoing 1%)?

What was the annual cost of running your pension before? And let's back up. We're addressing the symptoms.. why do you want to (or why do you need to) transfer? We're automatically assuming that action is required and/or the right thing to do.

SallyG

Do you feel your IFA's on your side?

weezie7

Al - thanks for reply.


No, transfer has not actually taken place, no paperwork through, apart from 'Illustration' from Royal London. Good to hear some positive notes about the actual Governed Fund thank you.


No idea about a 'Transfer Analysis' - what is that? Does it come from IFA or RL?


I wanted to get a better deal from my two pension pots and combine them, which is why I transferred them. I had to see IFA in order to do this. The transfer is not the issue, it is purely the costs for the IFA. I'm not happy with the way he has informed me about the costs and seem to be a bit stuck with him!


The funds were, I recall, no charges on one, and 0.5% on the other.

weezie7

SallyG - not sure if IFA is on my side........ he appears to understand what I want, but I just feel he is not very thorough at times (getting my marital status wrong, forgetting my name, appears to get irritated by me asking for photo copies of stuff).


Whilst I know it is his job and I should be able to trust him, I was very clear about asking about charges initially. Although he charges about £250 per hour, the transfer cost means he must have spent about 18 hours on my paperwork. I find that hard to believe as I was very clear about what I wanted. I did listen to what he suggested, there was one other option, but I quickly dismissed that in the second meeting, which was before he had made any contact with the original fund holder.


I have had 2x 1 hour meetings and another 45 minutes with him so far.


I want to trust him, as he will be 'overseeing' the fund, but am annoyed that it wasn't clear and 'transparent' about his initial transfer. It makes me wary of him.

Al.

weezie7 wrote: »

Al - thanks for reply.


No, transfer has not actually taken place, no paperwork through, apart from 'Illustration' from Royal London. Good to hear some positive notes about the actual Governed Fund thank you.


No idea about a 'Transfer Analysis' - what is that? Does it come from IFA or RL?


I wanted to get a better deal from my two pension pots and combine them, which is why I transferred them. I had to see IFA in order to do this. The transfer is not the issue, it is purely the costs for the IFA. I'm not happy with the way he has informed me about the costs and seem to be a bit stuck with him!


The funds were, I recall, no charges on one, and 0.5% on the other.

Weezie,

Let me declare an interest or two first off. I'm an IFA and I love Royal London. Second, I am not against another IFA making a good living out of working hard for a fair buck. I've driven my overhead down ruthlessly and I can now charge 0.25% upfront and 0.34% per annum for simple advice - not all can, but that's what I decided to do a few years ago. That's not an advert for me by the way - cheapest isn't always the best.

I'm not saying this IFA is right or wrong in charging you what he has done - that's a commercial decision between you and him and it's not my place to intrude and comment on the rights and wrongs of that. However, a transfer analysis should be undertaken and kept on file to justify the integrity of the advice. It should take into account (but not be confined to) the costs incurred. If you want to combine your pensions, fine.. that's a fair reason - as is fusing your retirement strategy etc etc.

But is the upfront hassle of not having only one and not two envelopes each year worth £4k or so though? If a client came to me, I'd probably look holistically (horribly overused word!) at the investments too, and suggest that if (IF!) they needed to be moved, then it's a possibility that the investments and the pension could be placed on one suitable platform, thereby potentially saving you even more and enhancing simplicity and functionality. But I do like Royal London though, so hats off to him for choosing it!!

I don't know the facts though. If I were you, I'd certainly ask him if he has done a report demonstrating the research and other analysis, including the impact in yield that you'll now face, on costs. That's upfront costs and ongoing costs. You'll now be paying 1.5% or so ongoing instead of 0.00% and 0.50% ongoing which you are paying currently. You might value the value of the new advisory aspect, but how much harder must your fund now work to justify it?

kidmugsy

I'm not an IFA. I don't like the sound of your IFA. In your shoes I might well back out of the deal while there's still time and find an IFA in whom I had confidence.

tell_it_how_it_is

Each to their own of course, but I personally couldn't ever pay such a high fee - I wouldn't see it as a justifiable.