Fund management fees

Zeek

I have some money invested with St. Andrews Life via Halifax Financial Services. From this I draw down a tax free sum every month. I have been informed by Halifax that they are increasing their management fees. I have heard that companies like intelligentmoney, Hargreaves and Charterhouse will manage the same account for a nominal fee and then re-imburse you with a lump sum of the charges. Is this true, are they safe and does the money stay where it is? Does anybody have knowledge of this practise and/or these companies?

jimatko

It's not clear what type of investment you have (bond/unit trust/pension), nor how much you have.

The likes of HL do it but check out any other costs, eg Sipp costs if it's a pension.

Also check out fund performance. You will always find a better performing fund out there but are your funds doing what they should within the correct risk framework?

Zeek

Details are: £150,000 invested.
The "plan" is a Personal Investment Plan" (which is a life investment plan) split 50/50 between my wife and myself. It is invested in a Cautious Managed Fund. We draw down 4% each month as part of my retirement income.
Fund costs are going up to 1.15% p.a. Quite a lump.
As for the performance, well after a year of income we are still above £150,000 but we have recovered from the recent city problems which saw us drop below.
I would like to reduce the "overheads" if possible but I am a cautious guy!!

dunstonh

The "plan" is a Personal Investment Plan" (which is a life investment plan) split 50/50 between my wife and myself. It is invested in a Cautious Managed Fund. We draw down 4% each month as part of my retirement income.

You invested £150k all in one fund???

Fund costs are going up to 1.15% p.a. Quite a lump.

Thats not quite a lump. Anything less than 1.50% is good. Although for a cautious managed fund only, you would look for 0.8-1.0%.

I have heard that companies like intelligentmoney, Hargreaves and Charterhouse will manage the same account for a nominal fee and then re-imburse you with a lump sum of the charges. Is this true, are they safe and does the money stay where it is?

Active management costs money. A servicing IFA would do the servicing out of the trail commission that is paid. An active portfolio would have a higher charge which may be offset against the trail commission but many charge on top. A couple of the companies you listed would be closer to 2%p.a. than 1%.

Active management is better suited to higher risk investors. Cautious managed are better with IFAs with say annual reviews and rebalancing.

At the moment, you have some tied agent invested product with eggs all in one basket. It needs sorting.