ReAssure

thelastname

Hi hoping one of you kind contributors can help please?

I wish to go down the route of flexi-drawdown when I retire in a couple of months.

My pot of £95,000 is with ReAssure (formerly with Guardian).

They have written to me showing my possible options including flexi-drawdown. This is new to me although I have viewed the site many times and posted a few months ago and I feel I want to try the diy method rather the fork out a couple of grand to an IFA. I am not a risk taker so my preference would be a low to moderate risk. I am currently doing my homework on the subject.

I am not totally reliant on this income as am mortgage and debt free.

However, my question is, bearing in mind that ReAssure do not seem to get a good press on this site or other review sites as their main function seems to be in mopping up old defunct schemes,
would it be a bad move to take out ReAssure's flexi-access scheme or should I transfer whole pot to another provider?

Or should I ask, does anybody have any experience of the ReAssure scheme?

I have written to them to ask whether an exit penalty would apply if transferring out.

There aren't any guarantees with this policy.

They also say that on reaching 65 my pot will be invested in short term with profits as opposed to the long term with profits which make up part of my fund. Is this something I need to worry about in case I decide to leave the pot where it is for the moment?

Many thanks

TrickyDicky101

Do you know what range of possible investment choices (ie types of funds, whether bonds or equity based, geographical exposure - that sort of thing) would be open to you with a ReAssure flexi?

ReAssure doesn't actually undertake the investment management of the underlying funds within the ex-Guardian With Profits funds at a stock by stock level - this is achieved by outsourcing the management to investment managers such as BlackRock.

They will, however, set broad investment exposures eg 40% Equities, 20% Gilts etc in line with the PPFM of the fund.

They also make use of their parent company's investment management function Swiss Re Asset Management.

It's worth bearing this is mind as commentary against (or for) ReAssure on this board is probably not as a result of ReA's own investment strategy - it is more likely to be a result of administration failures (eg not paying maturities in a timely manner). That's not to wash away such concerns, however, but - dependent on investment choices available in the flexi drawdown - you may not substantially improve your options by moving elsewhere.

In terms of Long/Short WP funds - what they probably mean is transferring the body of your investments into short-dated bonds/cash. These securities won't move much in response to market conditions so they are low risk (and low reward). It means that you won't be exposed to suddenly losing most of your cash after you are 65. It's effectively a 'holding' action until you decide what you want to do with it.

dunstonh

However, my question is, bearing in mind that ReAssure do not seem to get a good press on this site or other review sites as their main function seems to be in mopping up old defunct schemes,

ReAssure is a combination of many old insurance companies. I would totally disregard what you read about ReAssure unless it states what the legacy company was. Also, many of the threads that mention them tend to be criticising them without actually realising the limitations that are in place. Or where the person is blaming them for something that was the responsibility of the original company.

I generally have no problems with ReAssure. Some of the ex company sections are very efficient. Some less so.

would it be a bad move to take out ReAssure's flexi-access scheme or should I transfer whole pot to another provider?

All the in-house drawdown options I have seen have been more expensive than the IFA version of their product. Some of also been cut-down versions with less choice. ReAssure fit that model exactly.

You need to be able to analyse these things for yourself if you plan to successfully DIY.

and I feel I want to try the diy method rather the fork out a couple of grand to an IFA.

Seeing as the ReAssure option had awful investment selection and cannot support a number of drawdown strategies and is around double the charges of what you can get via an IFA, then you would be paying more charges than using an IFA. Probably around 4-5 years being the breakeven point.

They also say that on reaching 65 my pot will be invested in short term with profits as opposed to the long term with profits which make up part of my fund. Is this something I need to worry about in case I decide to leave the pot where it is for the moment?

If you are not able to understand minor changes like that, how do you expect to run a drawdown portfolio effectively? That is not a criticism. Just an observation. To DIY well, you need to know these things.

thelastname

Many thanks for your replies. I will take your thoughts on board.

xylophone

https://forums.moneysavingexpert.com/discussion/comment/72878902#Comment_72878902

post 3

https://forums.moneysavingexpert.com/discussion/5583030

MEM62

thelastname wrote: »

I want to try the diy method rather the fork out a couple of grand to an IFA. I am not a risk taker

You are planning to DIY your retirement planning without using an IFA. Unless, of course, you have the specialist expertise yourself I would say that you are very much a risk taker.

dunstonh

£100k pot (which this nearly is) is around £600 a year more than the cheaper options available via an IFA than ReAssure's poor quality option.

Lets say an IFA charges £1500 (which can be taken via the pot - tax efficient to do it that way). That means the £600 p.a. difference would be less than 3 years to break even. If we ignore growth, then over 20 years, that makes it £12,000 cheaper by using the IFA compared to going DIY with ReAssure.

So, saying you want to cut out the cost of an IFA is actually going to increase your costs. Not reduce them.

And for the few others that encourage everyone to DIY to cut out middlemen, just look at this thread as an example of how bad DIY can be costly.

AnotherJoe

dunstonh wrote: »

£100k pot (which this nearly is) is around £600 a year more than the cheaper options available via an IFA than ReAssure's poor quality option.

Lets say an IFA charges £1500 (which can be taken via the pot - tax efficient to do it that way). That means the £600 p.a. difference would be less than 3 years to break even. If we ignore growth, then over 20 years, that makes it £12,000 cheaper by using the IFA compared to going DIY with ReAssure.

So, saying you want to cut out the cost of an IFA is actually going to increase your costs. Not reduce them.

And for the few others that encourage everyone to DIY to cut out middlemen, just look at this thread as an example of how bad DIY can be costly.

That's somewhat of a false comparison since the OP asked if there was a cheaper provider than ReAssure, and there certainly would be. So if they did DIY that wouldn't be an issue. They haven't started yet and to write them off after asking a few questions is akin to saying that no one can DIY their pension. Maybe the OP can't do it right now but perhaps after all few months of research they could. (To be fair to IFas I don't think everyone is capable of DIYing but equally, that doesn't mean no one can.

Knowing what funds to use might be. You could for example start with a portfolio suggested by a service such as nutmeg. select your risk profile and use the categories of suggested funds for that profile and then pick low cost trackers within each category.

However, where an IFA could help is with the tax planning side of this - taking into account your other income there are various approaches to drawing down amd pension investment is a different kettle of fish to drawing down. if you use an IFA to help you choose funds I'd expect them also to help you minimise tax as well though a drawdown strategy. All this can be learned, if it couldn't then IFAs wouldn't be able to do it either !

thelastname

Many thanks for the very useful comments. I am certainly having second thoughts about not using an IFA now but am certainly keen on improving my knowledge with a view to going diy at a later date when I have time on my hands.

AnotherJoe

thelastname wrote: »

Many thanks for the very useful comments. I am certainly having second thoughts about not using an IFA now but am certainly keen on improving my knowledge with a view to going diy at a later date when I have time on my hands.

I think that is a good plan, make sure you understand the IFAs recommendations* so you learn from them and over time if you feel more confident and knowledgeable the you can move on from them. If not, stick with them.

* e.g. dont just take the allocation they give as gospel but understand why, not to question them especially but to learn (though if they cant explain why, find another IFA