Charges for pension advice

kidmugsy

beezkneez wrote: »

Advisor has replied and says that its a 4% fee for transferring the pension. There's no charge to exit the pension. The only other yearly fees are

Standard Life Charge 0.4% per annum
Fund Manager Charge 0.56% per annum
Advisor Charge 0.75% per annun

Geeze, there's not a lot left for you, is there?

Al.

beezkneez wrote: »

I'm going to try and find out tomorrow if they have been getting a % for the last years. I may not get chance till Friday

Yes the £1800 is 4%

My initial gut instinct. And please, this isn't advice. Are you tied in to your current scheme, based on your occupation? It might be that employer contributions are only made on your behalf, if they get paid into the one nominated by your employer.

Is it already Standard Life? If so, is a simple fund switch easier, cheaper and more appropriate? If not, why not? Something like a Royal London/Aviva contract might be far more suitable. The adviser wants 0.75%, fair enough, but historically, are they good for what they say they'll do? Do you even need ongoing advice? With a fund of that magnitude, I'd say 'probably'.

If you want to retain your existing adviser and if they haven't been performing as advertised, I'd twist their arms a little on that cost - are you in a dilemma now because of their inactivity, not despite it? If they magically appeared out of the woodwork to (gosh) all of a sudden churn something for a fee, I'd be sceptical and get their reasons in writing. By all means approach me off piste if you like for my view.

My first suggested course of action would be low impact. I'd look at the viability in the first instance, of a fund switch. In itself that costs, and it may not even be appropriate, but it'd be a damned sight cheaper than the advisory equivalent of open heart surgery. In which case anyway, I'd be getting a second opinion. Which, in a sense, you are doing.

Do you need to pay 0.56% for a fund (cheapest isn't always best) and more importantly, do you need to pay Stranded Life (whoops, spot of antipathy creeping through there, sorry) 0.4% for the privilege of hosting it for you? For most people, a Royal London contract is cheap (for a fund size like yours, you'll be cutting fund manager/house costs in half), the product is beautifully spec'd, we'll run, orderly and more than adequately functional for most people's needs.

Other advisers may not agree. So, grab a consensus. By all means ask your adviser why they'd suggest SL over someone like Aviva, Aegon or Royal London, ask for the difference in outcome to you, over time, of the reduction in yield caused by, say, the higher costs and ask if it's worth it. I do use SL on occasion, as I do, that gnashing sound is the sound of my teeth as I invariably do so under duress, but sometimes, they're the most suitable option in order to get the best client outcome. Is that the case with you though, and why?

Finally, this isn't a race. You've been stuck in your existing fund for a while, it seems - a few more weeks/month or so as you plot your path won't make much difference. Finally (again!), is your adviser taking your other circumstances into account?

Long day, early start. Ho hum.

beezkneez

Thanks Al

I'm mostly self employed and for an employed work I have no pension

I'm going to phone standard life hopefully today probably more likely tomorrow and see what I've been paying for

Any advice is appreciated

jamesd

For comparison an expensive direct to consumer SIPP provider is hargreaves Lansdown. If you don't use their advice service the charges would be:

1. 0.45% to Hargreaves Lansdown ongoing, charged in monthly pieces.
2. Around 0.1 to 0.25% for tracker funds or around 0.75-0.9% for actively managed funds.

Less expensive places eliminate most of the 0.45% part of that.

It doesn't seem likely that they can add sufficient value to justify the costs involved of using your current adviser. You probably don't need advice to transfer. A transfer is probably a good idea because it is quite likely that your existing plan is more costly than competitively priced current plans.

beezkneez

So I phoned today and the pension company say the financial advisor company hasn't been getting a %. They must have got something initially but I can't remember!

So now I need to decide what's best. The pension company said that I can do a transfer no problem for no cost and that although the fund has lost 9% in the last year in previous years it has made 40% so I guess that's the way it is

Now I need a plan and also to double check that I don't know owe the financial advisor any money to date. I'm sure I asked initially of there was a charge and they said no. I think what they have been doing is going through old customers to drum up business and that's why the contacted me

So now I need a plan!

jamesd

Just to get you started here's an idea for an initial plan: transfer to HL and invest the money in the Vanguard 80% equity 20% bonds tracker fund. But really look for a cheaper place than HL to save their 45%.

AnotherJoe

And it shouldn't cost anything to transfer it either, unless there's a fee from the company you are transferring out from.