Move my pension pot?

Ali-OK

Al - are you saying that my IFA can't charge what he's proposed in the illustration and that's an error?

Al.

What you're presented with, on the illustration, should be what you sign up for. I may have misinterpreted your post, but it struck me that you were paying for initial money invested and any 'new' ongoing regulars - but not assets under management (annually). I may be wrong, but that's how I read it - see Dunston's contra perspective.

I will sometimes sit down with a client and we'll chew over some options.. I'll use a series of illustrations as frameworks for discussion. If we agree on a course of action that doesn't fit in with any of my examples, we can continue with app and I'll retrospectively cover it off and supply a fresh, bespoke illustration to reflect the client's chosen approach.

Hence, I had to go back to the client and get a fresh signature because although the client, in all likelihood, wouldn't have noticed, I wanted them to be aware of the error and I also needed them to resign the corrected application, showing not % on regulars but on ongoing fund.

It looks like your adviser is taking 0.5% on your regular contributions as well. That's spicy! Ask him to illustrate on the 0.5% transfer and 0.5% assets under management annual.. but without the charge on the regulars. I think you'll notice a dramatic impact in your favour. You should have (and it seems that you do) an illustration to reflect that - unless you're quoting from any post application Royal London paperwork of course.

If there's a discrepancy, ask your adviser - I'm sure all is fine. I'm not that long in this business (2008 or so) and most of the sharks have left. We really do have a (generally) very tight, compliant process. The only danger, I feel, is that horror stories are hidden in clear view and that many clients are aware of what they're doing, but not aware how disadvantageous their chosen course of action might be. I don't charge on regulars for no other reason than it strikes me as slightly immoral.

You pay for upfront and ongoing advice, management and governance - but the regulars too? Nah, not for me. Hope that helps?

Ali-OK

My gut feeling is to seek out a different IFA and start the process again. I don't feel comfortable going ahead with what I've got - we'd not had a full discussion based on the current illustration and switching report as the initial produced one was showing minus figures, so he took that away and emailed me the one I now have, offering to start the transfer and await my decision on the new regular contributions.

I don't have an illustration without charges on the new regular contributions as far as I can see.

I think it's becoming clearer I need to sit down with someone who explains more and gives options as you and Dunston are - I didn't get that and need to understand it better so I know what I'm signing up for when I come to do it. Your penultimate paragraph Al seems spot on!

So, maybe the RL Plan is a good one but all those charges are bringing it down to a potential outcome of being almost in line with my current PPP.

Al.

Drop him/her a line and ask for the revised one, I'm sure there's nothing dodgy. Then, if you notice how much of an impact the chipping away at your regulars has, ask for one without charges on the regulars. The adviser needs to make a fair profit too, so it might be that he suggests taking more upfront to offset (to an extent).

I wouldn't presume to comment on the detail of the remuneration you have agreed with him or her, but you need to have clarity and certainty of what it is, exactly, that you're paying for. It might be, that with explanation, you're happy with that.

Finally, don't forget - there's not always the need to press on with pension planning as quickly as some people think. It has to last you thirty years or more, so if you spend even thirty weeks chewing over the perfect solution for you, that's still a modest outlay in terms for endeavour, related to payback. There's a military adage; time spent in reconnaissance is seldom wasted.. unless of course, end of tax year is fast approaching!

dunstonh

I am reading your comments differently to AI.

0.50% of the fund value (whatever that is through growth, increments, withdrawals etc) is quite normal. nothing spicy about that at all. That is the way it should be.

If there was an initial charge being applied to the regulars (which your earlier post suggested it could be with that reference to 1%) then that would be "spicy". Initial charges on regulars cannot exceed 12 months of contributions. Plus, as you had agreed an advice charge, you would not expect any initial on the regular. However, your follow up post indicates there is not.

My gut feeling is to seek out a different IFA and start the process again. I don't feel comfortable going ahead with what I've got - we'd not had a full discussion based on the current illustration and switching report as the initial produced one was showing minus figures, so he took that away and emailed me the one I now have, offering to start the transfer and await my decision on the new regular contributions.

Don't act yet. Remember we are interpreting your comments which are in turn you interpreting provider illustrations. I am not seeing the problem with this that AI is seeing. My belief is that AI is concerned you are paying ongoing "initial" charges against the regular. That would be wrong (if more than 12 months) and also doesnt match what you said about the agreed charge. So, if there is an initial charge being applied to the regular then AI is right. If there is no initial charge applied to the regular and its just 0.5% p.a. of funds under management then that is OK and how it should be.

It would be unfair for you to lose faith in an IFA that is doing nothing wrong because of an incorrect interpretation based on a few lines of text. Ask the adviser to verify the charges to you. If it confirms no initial against the regular then its ok.

Al.

I agree certainly, about not reacting hastily.

I have no issue with the initial and ongoing, it's the almost suggestion of getting two bites at the cherry that I have trouble with. In addition, I don't take anything out of regular contributions anyway. It's fine to be remunerated on the basis of the fund as it grows, because you're advising on it. To draw prescriptively from regulars simply because you can, strikes me as greedy and unfair. Hence my horror when I made that mistake once.

dunstonh

I have no issue with the initial and ongoing, it's the almost suggestion of getting two bites at the cherry that I have trouble with. In addition, I don't take anything out of regular contributions anyway

That makes you unique. It also creates a conflict of interest for you. Although your website indicates you do take an "ongoing" figure which would include regular payments.

If you didnt take it against the full value under management then it can create conflicts of interest. For example.
1 - If the person wants a withdrawal, would you take it against the bit that is paying you an ongoing amount or the bit that doesnt?
2 - Would you tell people that paying the initial investment amount over 12 monthly payments would be cheaper for them as they would only pay ongoing remuneration against that first payment and not the 11 that followed?

Your business model would be unsustainable if you only charged against the initial contribution and not future regular payments. i.e. pay £240 initially into the ISA and set the regular payment at £1250. You would only charge ongoing against the £240 and not the £1250 paid in.

I swear I must either be reading you wrong or there is a misunderstanding. So, I repeat the three different methods of adviser charging that could be in play here.
1 - Initial charge (single one off amount)
2 - regular initial charge (against the regular contributions)
3 - ongoing remuneration based on fund value (whatever that is)

I am reading the posts to be 1 & 3 which is exactly how I would do it and how most advisers would do it. There shouldnt be any "2" in this case.

Your posts are suggesting that 3 is wrong (Despite it being what you do). or are you referring to regular initial?

Al.

I'll drop you a line privately. In respect of regulars though, and for clarity, I was referring to my face to face service as opposed to my Fiver a Day proposition. They are different models entirely. Their distinctions allow me flex to offer what's best for the client.