Advice on Transfering Money into Portfolio Account

krish123

Hi,


one of my parents Pension fund will soon be able to be taken and they want to put this into a portfolio they already have with Redmayne & Bentley.


Can they do this themselves and how quickly can they put the full amount into the portfolio (£128K).


Now their IFA is saying that they need to open another portfolio and to handle this he is charging 2.25%!


I don't see the need to open a second portfolio, can they not just transfer this money into the current portfolio they have and do it themselves and save the 2.25% charge?


I don't see how the IFA can charge this for simply transfer money into a portfolio?


the way I saw it is that my parents themselves could invest the money into there current portfolio and save on the charges?


They need to keep this money in there for 2 years before they can take it out (until my mother is 55).


The only issue I see is that it will be difficult/impossible? to put the full £128K in within 2 years?


Let me know your thoughts.

xylophone

If your mother knows the funds/investments she wishes to use, had she considered transferring the pension into a SIPP?

https://www.moneyadviceservice.org.uk/en/articles/self-invested-personal-pensions

http://monevator.com/compare-uk-cheapest-online-brokers/

Linton

krish123 wrote: »

H......


The only issue I see is that it will be difficult/impossible? to put the full £128K in within 2 years?


Let me know your thoughts.

Assuming Redmayne&Bentley isnt a SIPP.....

Their current pension fund may or may not support drawdown - the chances are that it doesnt. So first they probably will have to transfer it to a SIPP (or two SIPPs assuming pension funds for each) which does support drawdown. Having done that once they are 55 they could transfer the whole amount to Redmayne & Bentley in a week or two if they want, but only 25% will be tax free leaving £96K to be taxed as income at 40% plus or minus a bit depending on their other income.

If they dont fancy paying 40% tax they need to tie their drawdowns in with their tax bands to minimise the tax paid. It may be easier to keep the money in the SIPP and invest from there.

AnotherJoe

Two questions.
1) Why do they wish to remove it from where it is, and
2) Why not pass it into a SIPP, perhaps one opened for this purpose.

As per another poster, I assume the R&B isnt a SIPP?

grey_gym_sock

how is the IFA paid usually? on a servicing (i.e. an annual charge, whether that's a % of assets or fixed in £), or transactional basis? ... because if they are trying to take both kinds of charge, they may be being greedy, though it depends levels of charges, size of assets, level of service, etc.

an IFA can't just make a transfer without first investigating whether it's suitable, because they will be liable if it isn't. however, if they've already done the suitability investigation - and been paid for it - then why should they be paid again?

you need to look at what the IFA is being paid overall, and what they're doing for the money, to get an idea of whether they're overcharging.

can you pay an IFA to do some things, and do other things yourself? it's possible. but there are a couple of general issues to consider:

1) the IFA's advice may not make much sense if they aren't looking at the totality of your financial position. so they need to have some idea what's going on with the parts they aren't handling. or alternatively, some ppl may handle the top-level planning themselves, and only use an IFA for some specific issue which they need help with.

2) some kinds of providers, or accounts, are not offered direct to the general public, only via IFAs or other intermediaries. i have no idea whether this "portfolio" with redmayne bentley falls into this category. RB do offer some services direct to the public, but this might be something different. you could ask them.

is the "portfolio" a discretionary managed service? if so, that is probably really expensive, and i'd be wondering about replacing it with something cheaper - even a managed fund would usually be cheaper, and a passive fund would be cheaper again.