Private pension help

elduderino2

Hi
I will be 65 in January 2016. i have been paying into a private pension(Zurich self invested personal pension & protected rights transfer plan).
Fund based Charge is 1.05% each year. they have also taken 1.20% of the monthly payment fund value every year(I pay £152.00 per month for the plan), taken on a monthly basis by selling units in the plan.
The funds have extra yearly charges.

Zurich Pension Fund:

Allianz RCM BRIC Stars ZP 1.05%
Aquila US Equity ZP 0.17%
European ZP 0.16%
First state asia 0.72%
Inv Perpetual Mly Inc Plus ZP 0.79%
Latin America ZP 0.20%
Property ZP 0.29%
UK Corporate Bond ZP 0.15%
UK ZP 0.15%

I have a financial adviser who has informed me that Zurich do not provide a flexi draw down plan. At the same time telling me that the fee's charged by Zurich are on the high side.
& suggest moving it to one that does. Of course take a £3500 fee for the transfer, whilst having taken £2500 for transfering the pension plan to Zurich in the first place, also taking £420 per year admin.

My question is, has their advice been in my interests.

Regards

Linton

When was the Zurich plan set up? A lot has changed in recent years.

Charges are nonormally based as a % of total pot size. Roughly what is yours?

TH1878

elduderino2 wrote: »

Hi
I will be 65 in January 2016. i have been paying into a private pension(Zurich self invested personal pension & protected rights transfer plan).
Fund based Charge is 1.05% each year. they have also taken 1.20% of the monthly payment fund value every year(I pay £152.00 per month for the plan), taken on a monthly basis by selling units in the plan.
The funds have extra yearly charges.

Zurich Pension Fund:

Allianz RCM BRIC Stars ZP 1.05%
Aquila US Equity ZP 0.17%
European ZP 0.16%
First state asia 0.72%
Inv Perpetual Mly Inc Plus ZP 0.79%
Latin America ZP 0.20%
Property ZP 0.29%
UK Corporate Bond ZP 0.15%
UK ZP 0.15%

I have a financial adviser who has informed me that Zurich do not provide a flexi draw down plan. At the same time telling me that the fee's charged by Zurich are on the high side.
& suggest moving it to one that does. Of course take a £3500 fee for the transfer, whilst having taken £2500 for transfering the pension plan to Zurich in the first place, also taking £420 per year admin.

My question is, has their advice been in my interests.

Regards

I don't think anyone foresaw the changes in pension rules so you can't really hold that against your adviser and the portfolio, at first glance, doesn't look too bad.

However, I would say that you've probably got quite a lot of room for negotiation on the fees.

elduderino2

Hi
Thanks for the replies.

Charges are nonormally based as a % of total pot size. Roughly what is yours?

£86,700

The Pension was transferred from AXA Sun Life in 2010(£54000).
Prior to that i did not have a financial adviser.

Being a bit of a knob when it comes to finance, am i expecting to much?

Thanks

Linton

I dont think their advice is unreasonable. Generally old pension schemes cant handle new features as they are managed by bespoke software. Major changes to old software can be extremely expensive. 2010 was a long time ago!

The range of funds chosen and the individual fund charges look fine. The 1.2% on the payments in is very small as your payments in are pretty small.. Not sure about the "fund based charge" added to the admin charge. However the transfer charges look very high.

Who is your IFA? A national firm or a small local advisor? For £86K I would suggest the latter is more appropriate.

dunstonh

My question is, has their advice been in my interests.

Drawdown has been available since 2006. Flexi drawdown available since April. You bought in 2010. So, there is no chance your adviser knew what changes were going to happen in 2015 back in 2010.

Drawdown, whilst available for much longer, was and still is, treated as a higher risk transaction and a niche transaction (although that is slowly changing). Until recently, the general position was that it was suited to those with £100k plus funds and other wealth available and/or guaranteed sources of income who were less reliant on the pension income.

The use of a Zurich pension is not that common. It was mostly used by tied agents of Zurich rather than IFAs (although it was available to IFAs). So, if your adviser is a tied agent, then you should look to change to an IFA.

2015 pensions are generally better value than 2010 ones. Which in turn are generally better than 2005 which in turn are generally better than 2005 etc etc. Exceptions do apply as there are some old gems out there which are very good value or offer terms you just cant get today.

Financial products are a bit like any other retail product. They change, they update and you can find yourself on a obsolete product over time or a classic that was worth every penny.

All that said, £3500 for a transfer in 2015 is disgraceful. Especially if there is ongoing servicing. For example, if I have a client on ongoing servicing and a better provider/option comes out then I move it at no initial/switching cost. That is part of the ongoing service that you are paying for. if your fund is not that big then maybe it would be justifiable for the adviser to make a switch/initial charge but nothing near the £3500 figure. if the adviser was not receiving ongoing remuneration for advice, then charging an initial figure would be perfectly normal and acceptable. Although not £3500.

elduderino2

Hi
Thanks for the replies.

Linton,

Who is your IFA? A national firm or a small local advisor? For £86K I would suggest the latter is more appropriate.

They are a local IFA based in Lichfield.

I have been in touch with Zurich, & they tell me that they do provide Flexi Draw down.
Zurich fee to change would be £82.30
If i dont draw any money out(i have an existing Previous employer Pension, + state pension January 2016) the fee per year would be £54.85
If i draw money out the fee would be £131.75 per amount drawn out.

I will not pe making any more plan payments after January 2016

At present i dont need to draw money out, but should i draw the 25% tax free lump sum?
Is there anything else i should be asking.

Thanks.

elduderino2

Hi
Zurich tell me that .05% of the 1.05% yearly Fund Charge is paid to my IFA. So if i change to a Flexi Draw Down with Zurich the 05% will not be paid to the IFA. so i would still be paying 1.00% to Zurich.
Even if the fund was only worth £20,000 the fee would still be 1.00%.
Is that reasonable?

Thanks

maximumgardener

as seen from earlier posts ...your fees are sky high as things stand.
£3500 is exorbitant on £ 86.7K

are you planning to keep working beyond 65 ?
state pension factored in etc ?
future income needs ?

consider transfer to a low cost platform via a local IFA?
you should get a deal " all in "in region of 1.5%...depending on funds selected etc

elduderino2

Hi
Thanks for the reply.

are you planning to keep working beyond 65 ?
state pension factored in etc ?
future income needs ?

I am self employed, & will continue part time.
I have an existing index linked pension from former employee, & intend to take the State pension in Jan 2015.
I believe at present that the part time, plus the two pensions will be enough for me.
As stated earlier, i dont need to withdraw anything from the Zurich, just find somewhere with low fees, & a decent investment for the future.

Thanks

TadleyBaggie

elduderino2 wrote: »

suggest moving it to one that does. Of course take a £3500 fee for the transfer,

Seems a lot to me. I currently have an IFA transferring 5 PP, 1 FSAVC and an existing drawdown to a single fund, and it is costing me around £2K.