Switch to Old Mutual CRA?

wary

My main pension is invested in a L&G Portfolio Plus SIPP, currently invested in multiple L&G funds via Cofunds. I recently switched to a new IFA, who has prepared a comprehensive report recommending that I transfer it to Old Mutual Wealth CRA.

Although my L&G seems to have performed reasonably well recently, his recommendation appears to be primary based on past performance (although not necessary a good guide to future performance of course), highlighting:
- L&G charge no exit fee
- OM charge no set-up fee
- Overall annual fees would increase by 0.123%, but the lower L&G fees are only due to my fund selection being restricted to L&G’s own, rather than accessing the 1000s available via Cofunds

Current pot is circa £315K, I’m 54 and may commence drawdown within the next year. I’m very unlikely to purchase an annuity anytime soon (maybe something to consider in the distant future using the remaining pot at that stage).

In order to help me decide on whether to go with his recommendation, I’d appreciate feedback on
- any additional factors that I should consider
- thoughts on OM CRA, particularly in comparison to my L&G
- whether a transfer at this late stage would generally be advisable

Thanks

wooder

I have a OM Collective Retirement Account which my IFA set up about seven years ago by amalgamating a hotch potch of pensions that I had accrued over the years.

He invested me in the Spectrum 5 fund which bimbled along for about six years, growing, but not significantly. Last year (almost exactly one year ago) I disconnected from the IFA and took control myself and registered with OM for online access and I have to say their website and access is brilliant. When I took control I switched funds, which you can do literally by the click of a mouse, and have grown my pot by 40.5% in the last year. Everything seems super easy and they answer phone calls promptly and don't divert to a call centre.
Good luck

tacpot12

You should be looking to the IFA to explain/justify the additional performance you can reasonably expect as a result of the wider selection of funds, e.g. by comparing the return of your current portfolio over and the return of a model portfolio they recommend for clients with your risk appetite.

You have not mentioned whether the Old Mutual CRA would carry higher or lower fees for drawdown. I would check this carefully with the IFA and get it in writing.

wary

Thanks Wooder. His report specifically proposes OM CRA 14 funds across which I should invest, although he would review this twice-yearly. So a reasonable amount of diversification. My new risk profile would be the low end of medium.

wooder

tacpot12 wrote: »

You have not mentioned whether the Old Mutual CRA would carry higher or lower fees for drawdown. I would check this carefully with the IFA and get it in writing.

I am a couple of years away from drawdown myself but the last time I spoke to OM they told me there would be no fees for drawdown. I'm pretty sure that's what they said as, at the time, I was trying to calculate costs of pension vs Isa including all charges

Malthusian

tacpot12 wrote: »

You have not mentioned whether the Old Mutual CRA would carry higher or lower fees for drawdown. I would check this carefully with the IFA and get it in writing.

Probably lower as the L&G Portfolio Plus SIPP has additional charges for drawdown whereas Old Mutual have none. But yes, you should look at what the IFA's report says.

I would ignore largely ignore the question of performance as there is no guarantee that the IFA's chosen funds will do any better or worse than your current ones in the future (if we are talking about the same kind of risk profile and asset allocation). But if the charges aren't going to be higher I can't see a problem.