Should I swap to Aviva PP from Standard Life PP

jk38

Hi,

I took out a personal pension in the early 90's with Standard Life paying 1% per year fees

I have £120k in the pot

An independent financial advisor is advising that I transfer it into an Aviva pension which will perform better as the Aviva will access a larger number of funds and investments so reducing any losses by spreading further (2500 rather than 250 Standard Life are using)

It will cost me £1200 to transfer plus his company takes a 0.5% per year on top of 1% Aviva will take

He's shown me comparison graphs of the last 3 years and the Aviva did perform better than the Standard Life

I'm struggling to believe Standard Life don't follow a similar investment model to Aviva and he couldn't answer why they don't but is saying SL aren't putting the effort in Aviva will

Just don't know if I should transfer to Aviva to get projected increased growth (according to his graphs) but he does say past performance is no guarantee of future growth

Any comments or advice greatly appreciated as I just can't decide what to do , leave it where it is or transfer it at cost and increase annual fees to what looks like a better performing product?

d70cw6

why pay someone to transfer it? just do it yourself.

bigadaj

I'm not sure he's allowed to show increased returns like that, the only valid comparator is really fees and charges as these are fixed and they appear to be increasing, is the adviser independent or not?

Increasing returns would normally imply increased risk, how does the portfolio he's proposing compare with the funds currently held?

Overall the charges look expensive on both current and legacy schemes, schemes with good fund options are available from 0.5% annual charges for example.

greenglide

So it is a move from one provider to another with the charges looking about the same but also adding a ongoing charge of 0.5% for ongoing service from the IFA.

What will he provide for that? Are you happy to pay 0.5% for ongoing service which, presumably, will cover future fund / provider swaps, rebalancing etc?

Would it give you peace of mind that the funds are being "looked after" or would the ongoing charges worry you? Do what you are happiest with.

maximumgardener

your options seem to be very limited & don't seem to stack

why don't you ask another IFA for an opinion?

eg transfer to low cost provider e.g. fund supermarket
& invest in a range of decent funds with some diversity
keep investing & build up your S&S isa's as well ??

dunstonh

It will cost me £1200 to transfer plus his company takes a 0.5% per year on top of 1% Aviva will take

Aviva's charge on £120k is not 1% There are three charges
1 - platform/provider
2 - fund/investment
3 - adviser

I'm struggling to believe Standard Life don't follow a similar investment model to Aviva and he couldn't answer why they don't but is saying SL aren't putting the effort in Aviva will

Standard Life do have their own platform. It is more expensive than Aviva.

Aviva's contract is good. It is a full function pension with internal funds and UT/OEICs available. It frequently comes out at the top end of the charge comparison. The platform software is weak compared to others but that is not a major issue. Especially as Aviva are moving software providers.

Mothman

I transferred a pension into Aviva via Cavendish Online. AMC on +£100k is 0.45% pa though not sure how this would compare with what an IFA could offer. From memory the transfer took 2-3 weeks from start to finish and was easily done, just a few forms to fill in.

If you go this route then you have to be confident with choosing your own funds to suit your risk level and goals. Also keep in mind that with most pension transfers you will be out of the market for a period during the transfer process. In my case it was 7-8 days and cost me around 4% due to a market swing, just bad luck I guess as it could just of easily have swung the other way and I'd have been smiling. If going through an IFA it may be worth asking if they are able to reduce the time you are out of the market as I don't believe the option of a same day transfer for a fee was mentioned on any of the forms I completed.

dunstonh

I transferred a pension into Aviva via Cavendish Online. AMC on +£100k is 0.45% pa though not sure how this would compare with what an IFA could offer.

Depends. The default is 0.45% but we get special terms which is lower. It wouldnt be any higher.

Both SL and Aviva are very good on transfer times. You are talking days only. Not weeks.

robber2

correct that bit for you;

"An independent financial advisor is advising that I transfer it into an Aviva pension which will perform better OR WORSE as the Aviva will access a larger number of funds and investments so reducing any losses by spreading further (2500 rather than 250 Standard Life are using)"

wjr4

Why don't you just switch funds? Check which funds are being recommended and look at the similar standard life ones?

Check the exact charges you are paying now vs the exact charges you would pay if you transfer. The IFA should be transparent with the charges including fund charges.

jk38

This is the main point I need advice about

The FA is saying Standard Life only have a pool of 250 funds where as Aviva have 2500 funds to choose from

That can't be right can it, that Standard Life don't have access to a similar number of funds that Aviva have access to ?

The IFA is stating this lack of funds at SL is why I should move (at transfer cost and increased annual fees ) to Aviva as it has shown to perform better so should make the extra charges I'll be paying back many times over