Transfer out of Final Salary Scheme

Retiring1

dunstonh wrote: »

0.5% p.a. is the dominant figure charged by IFAs. The initial is good for a DB transfer (see other threads where two or three times that is common).

Thank you, I understand and accept my IFA fees, but I don't inderstand the platform/fund/Policy fees as follows:


""I will also be asking about the fees, which are as follows (I don't understand the Policy Fee at all)

Fund charge .73%

Policy Fee

£22.50 applied twice annually in advance, increasing at 0% starting from the outset until the fund level reaches £100,000
0.25% applied monthly in advance starting from the outset until the fund level reaches £100,000
0.15% applied monthly in advance starting when the fund level exceeds £500,000 until the fund level reaches £1,500,000
0.2% applied monthly in advance starting when the fund level exceeds £100,00 until the fund level reaches £500,000
0.1% applied monthly in advance starting when the fund level exceeds £1,500,000 until the end of the contract""

dunstonh

You have an investment platform. Basically an administrator for the investments. They need paying for. And the investment charges. The charges are exactly the same regardless of investment platform (bar a small number of special pricing deals - known as superclean share classes - which are normally only 0.05% off the normal price).

So, if you held the same investments on abc platform or xyz platform they would be the same bar potentially tiny differences in superclean pricing. I can see some superclean share classes in your list.

This way of splitting charges of platform/provider, investment and adviser was known as unbundling. The old fashioned way (which is no longer allowed on new business since 2013) is the single AMC covering the lot)

Retiring1

I'm still awaiting the arrival of the funds (should be anytime now acording to the IFA) and they will immediately be invested as above.



I would now like to build a mock portfolio, (or maybe two) using trackers, to see what I could do by comparison. This will be a learning experience over a couple of years to see if and when I feel knowledgeable enough to go it alone. To start with I'm thinking 52% worldwide, 35% UK, 8% Corporate Bonds, 5% UK Property. The worldwide could be broken down into contingent areas and the UK into smaller companies. I'm revisiting Tim Hale, and I hope some of ou kind experts on here might also steer me in the right direction when I veer off course.

kidmugsy

Retiring1 wrote: »

I would now like to build a mock portfolio, (or maybe two) using trackers, to see what I could do by comparison. This will be a learning experience over a couple of years to see if and when I feel knowledgeable enough to go it alone. To start with I'm thinking 52% worldwide, 35% UK, 8% Corporate Bonds, 5% UK Property.

At the age you two are you presumably want to look at capital preservation as being more important than capital growth. The obvious tools for preservation include use of derivatives (about which I know nothing), more use of bonds, more cash, gold.

So if you have the appetite for two mock portfolios may I suggest that one is devoted to preservation. You could, for example, model them on the investments held by Personal Assets Trust and by Ruffer Investment Company. Both publish lots of interesting reading on their websites. You could model the equity part of their portfolios using trackers or investment trusts, and the gold using ETCs. It might be fun to see how it would go, and you would have a natural benchmark - namely the performances of PAT and Ruffer themselves.

Another possible preservation portfolio would be the Harry Browne Permanent Portfolio or its recent variant the Golden Butterfly. (Honestly!)

Retiring1

Lots more reading to be done now, thank you for your time Kidmugsy, it's much appreciated