Personal pension - not great?

moneysaverz83

No, he couldn't understand because he no longer has access to my record or arrangements, but did mention the October 2018 drop, as you pointed out

moneysaverz83

OK, so have I read the statement wrong because of the way its worded?

Is it trying to say 'your 40k pot will be 158k in 32 years if untouched with further contribution' rather than if you continue with your 3600 per annum contribution? I'm self employed so the tax relief reduces my tax bill.

Audaxer

tacpot12 wrote: »

At your current rate of saving, and with an average rate of return (after charges) of 5% pa, when you are 68 your pot should be worth over £500,000.

He could possibly average 5% per annum average over 30 years, but we don't know whether he has a high, medium or low risk portfolio in his pension as far as I am aware.

moneysaverz83

OK, so I've had some more information.

I thought my IFA who switched firms after the last was taken over, had taken me, as a client, with him. I found out that was not the case.

He has said about this :

- he is unable to take on new clients at the New firm as he is full

- a colleague at the New firm has been recommended by him, and he advised me to take up the opportunity as this colleague does not take on new clients

- he does not know if I was assigned a new IFA, as he no longer has access to my file, but the contract is between myself and the advisory firm and not the specific advisor

- the fees SW pays the IFA are mostly for administrative purposes rather than active management / planning, approx 0.5% value of the pension per year. With his fees of a few hundred pounds per hour usually, he couldn't provide more

- he doesn't know if the 0.5% commission was stopped when he left, I need to ask the firm. I guess they may have continued, but would that have been right? Said I need to check with them

- said there are no charges / fees moving from his old firm to the new one where he's recommended the colleague and everything would stay the same. I would need to discuss with the new colleague his fee structure in terms of how much management I require.

So, overall, quite confused, as I feel back to square one when I started saving in 2011.

I was put in touch with an IFA who the family knew. I did all the questionnaire with him on risks etc, I was allocated a particularly strategy with SW. Turns out wasn't as actively managed as I hoped.

So, now, I've been left to my own devices with the advisory firm and SW last two years.

Now, I'm being recommended another guy, who I don't know and I guess will either leave me to it or ask for more cash for more active management.

So, I don't know where to turn.

Re: annual statement specifics, maybe I read wrong. I won't quote exact figures, but it says:

'Dec 2017: £39,500
Dec 2018: £40,500
Your pension plan has decreased by £3500 as a result of investment performance, after charges we make for running your policy.

At 68, your pot could give you £155,000, based on the value of your plan on Dec 2018'

OK, just dug out my old file. Maybe people can shed light if it's a good allocation :

3% fidelity SE Asia fund
12% SW Balanced solution fund
15% Newton managed fund
5% invesco perpetual distribution fund
16% fidelity special situations fund
17% schroder managed fund
4% schroder Tokyo fund
22% Baillie Gifford managed fund
6% SW MM global Real Estate securities fund

I am risk category 6:

Cash 0%
Uk corporate bonds 16%
Property 8%
Uk equities 43%
International equities 33%
{usa 30%, Japan 15%, Europe ex UK 25%, Pacific ex Japan 15%, emerging markets 15%}

When I was investing 250pcm:
Fund value £314000 (5%), £508000 (7%), 846000 (9%).
Guess bit higher now I'm putting in 300pcm

So, guess Q is:

Do I stick with SW and this allocation and firm with no active management, switch to IFA new firm and new IFA, get a SIPP which I have no idea about

Bimbly

1. Get in touch with the original firm and find out what's going on.
2. Say to original firm that you are thinking of moving to your original IFA's new firm. But maybe you could stay if there is an IFA at that firm you would be happy with. Can they arrange a free introductory chat?
3. Say to new firm you would like a free introductory chat with the new IFA who is being proposed to see if you will get along.

See how you feel after chatting to both firms.

Make sure they both really are independent.

You can always come back here for more feedback, such as on fees and contribution levels and all that.

dunstonh

- he doesn't know if the 0.5% commission was stopped when he left, I need to ask the firm. I guess they may have continued, but would that have been right? Said I need to check with them

2013 saw a rule change. Ongoing remuneration on new business after Jan 2013 could only be paid where there was an agreed ongoing service being provided. Commission was banned on new business but could be retained on historic business. Commission was not for the provision of an ongoing service. Although many adviser firms would do that.

Do I stick with SW and this allocation and firm with no active management, switch to IFA new firm and new IFA, get a SIPP which I have no idea about

From the fund names you have, it would suggest you have the SW retirement account (this allowed a mix of insured funds and unit trust/oeic. The lack of SW in the front of most of the funds indicates they are not insured funds. Their PPP only offered insured funds).

The retirement account was SWs half hearted attempt, given their lack of budget, to build a modern(ish) pension. Dated by modern standards. However, it offers many of the same investments as a SIPP.

moneysaverz83

OK, so how should a modern set up look? Who would I go to for this? Is it that dated that it's terrible and I move?



And if the ones without SW in front : not insured? Should that be an alarm bell or necessitate a move?

dunstonh

OK, so how should a modern set up look?

It depends on the person. I used an older style pension for someone this week as that was the most suitable option for them (it does all the modern things. Just in a old fashioned way). There is wide variety of options to suit all types.

Who would I go to for this?

This is where you either research if you plan to DIY or use you an IFA to do it for you.

Is it that dated that it's terrible and I move?

Its not terrible. Certainly not. However, its an easy one to justify moving from. It can be beaten on all fronts by other providers. It doesnt mean its bad though.

And if the ones without SW in front : not insured? Should that be an alarm bell or necessitate a move?

No. Its just a different style of investment fund that has different rules applied to it. For some people, using an insured fund (or contract as sometimes it is the contract that is insured) can be important to them. Internal insured funds get 100% FSCS protection with no upper limit for example. Whereas unit trusts/OEICs do not. For experienced investors, that will not be a concern.

moneysaverz83

I have finally got to the bottom of this after speaking with the old firm and SW.



My IFA didn't transfer me to his new firm. The takeover firm couldn't understand why as they thought other clients had. I will speculate that its because I was not requiring active management or seeking paid services and because my holding was small.



Speaking to the sw, they haven't paid out commission to anyone since 2016 when the change happened.



Speaking to the old firm, I was not assigned a new IFA, and am no longer on their books. They said they charge 1500 per annum and advised because of my age/monthly contributions / current pot, it won't really be in my interests. They gently advised speaking with / sticking with SW or maybe going to an online platform like Hargreaves while I built up my pot.



I have emailed the IFA that my old IFA recommend to hear their thoughts.



So, the last 2 years I've not had an IFA. I didn't have any changes made in the 5 years previous when I did have an IFA as I was just starting out.



SW did say they trialing a scheme I think called CET? Something about IFA hired from outside to do some checking and advising on portfolios or pensions, if I was interested in that.



So, not sure I know where to go next.MMy pot is small as I'm still young. I probably don't require any active management since I appear to be on a good plan. Do I stick with SW without an IFA, Stick with SW and engage the new IFA / another IFA (I don't know any, but could seek personal recommendations locally), change to another platform / provider either with / without IFA. I do know that I don't really want to go through a SIPP since I don't know what I'm doing, unless there was a ready made/balanced one available.

Albermarle

I think the main point is that if you leave it with SW for now , nothing bad is going to happen, so no need to rush into anything.
When it is said that the SW offering is not the best , it means that there are nowadays similar offerings with a bit lower charges and maybe a more modern website/on line speed of access /customer service etc.
It does not mean that you have a bad pension , only probably if you shopped around you can find a marginally better one.
What is more important is to keep contributing the money each month and hope that the markets pick up . Then in the longer term you could think about moving the pension when you have had more time to research all the facts.
Probably your relatively straightforward situation and only a modest pot , means you can normally manage without an IFA.