Self Administration of Pension Fund

Dr_Thrifter

I would be really grateful if anyone can advise or share their own experience of self managing their pension, thus saving the cost of a IFA?

I am recently retired and my pension fund is now with an Old Mutual Wealth Managed Portfolio Service and even my IFA admitted that it can be left there for years without additional administration from an IFA, yet I continue to pay the IFA a monthly fee which is a percentage of the total value of the fund. I am looking for sensible ways of minimizing IFA fees. As well as exploring ways to self administer the fund without the services of an IFA I am also interested to know if there are IFAs who charges fees only for specific services in relation to pensions without a percentage 'trail' fee?

xylophone

https://moneytothemasses.com/saving-for-your-future/pensions/the-best-cheapest-sipps-low-cost-diy-pensions

https://forums.moneysavingexpert.com/discussion/5583030/coolly-comparing-investment-platform-charges-snowmans-spreadsheet

Brynsam

Dr_Thrifter wrote: »

I would be really grateful if anyone can advise or share their own experience of self managing their pension, thus saving the cost of a IFA?

I am recently retired and my pension fund is now with an Old Mutual Wealth Managed Portfolio Service and even my IFA admitted that it can be left there for years without additional administration from an IFA, yet I continue to pay the IFA a monthly fee which is a percentage of the total value of the fund. I am looking for sensible ways of minimizing IFA fees. As well as exploring ways to self administer the fund without the services of an IFA I am also interested to know if there are IFAs who charges fees only for specific services in relation to pensions without a percentage 'trail' fee?

Perhaps this is a conversation to have with your IFA? You may be surprised by how helpful the reply could be - has to be worth a go, surely?

tacpot12

My experience is that managing my pension fund was easier prior to retirement than after. In the pre-retirement phase, all I needed to do was select the funds I wanted new cash going into the pension to be invested in, and to switch the funds that previous investments were in. I only bought Accumulation (ACC) units so didn't need to do anything about dividend reinvestment. Understanding the performance of funds and researching them took relatively little time using Trustnet.

Things got more complicated after retirement, but I also had more time then.

The risk with self-management is that your portfolio underperforms the portfolio that an IFA would have selected for you, but it is difficult to know what the performance of any such notional portfolio would be. I decided to self manage because I thought that it would be difficult for a professional to outperform a DIY portfolio by the average level of charges which seemed to be about 1.5% for Discretionary Mamagement, given that I would have access to the same funds at the same charges as an IFA. I'm happy with the outcome so far.

Albermarle

Normally with an IFA , you can have a one off consultation/review for a fixed price . They should point you in the right direction, give advice on tax , future planning etc .but then you have to make and manage the investments yourself .
Or they offer an ongoing service like you have and charge a % of the fund ( usually about 0.5% to 0.75% I think )
The issue you have with Old Mutual Wealth is that as far as I know you have to go through an advisor anyway .

dunstonh

I am recently retired and my pension fund is now with an Old Mutual Wealth Managed Portfolio Service and even my IFA admitted that it can be left there for years without additional administration from an IFA, yet I continue to pay the IFA a monthly fee which is a percentage of the total value of the fund. I am looking for sensible ways of minimizing IFA fees.

That OMW service is not typically used by IFAs but used by FAs. Especially FAs that work for OMW (intrinsic network appointed representatives).

Are you sure yours is an IFA? I wouldn't go near their wealth selection.

I am also interested to know if there are IFAs who charges fees only for specific services in relation to pensions without a percentage 'trail' fee?

Yes. Although usually it is more expensive.

OldMusicGuy

I self manage a large DC pot. It's taken me about 5 years to get to the point where I am comfortable in making investment decisions and also to identify my true appetite for risk. I retired one year ago and only invest in multi-asset passive funds. I have created a retirement strategy that works for me and I would be wasting my money if I used an IFA because my investments need very little attention.

You should read these books by John Edwards: "DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning" and "DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing", along with "Investing Demystified" by Lars Kroijer. They will help you decide if DIY investing is for you. It isn't for everyone btw.

bostonerimus

The portfolio part of retirement self management is not too difficult, it's controlling spending and cash flow that's the hard bit.

I have most of my money in just 3 tracker funds; a domestic bond fund a domestic equity fund and a global equity fund. You can get a very similar portfolio using multi-asset funds as OldMisicGuy suggests. Keep a year or so spending in cash and short term bonds that can be quickly accessed and then just take dividends and capital gains from your portfolio to top up you bank account. Most people will be planning to spend some of their capital and this can be psychologically difficult and financially bad in down turns so do some reading about "variable withdrawal rates" and Guyton methods.

RealtimeBlues

Open a SIPP with HL or similar, transfer all your pensions to it.
Choose what funds and shares you want in your portfolio depending on your risk tolerance, and enjoy the ride.
Of course read and learn and ensure you don't loose valuable bonuses etc by transferring
Or take a lucky dip and hope you get a great IFA and still end up doing above but several grand lighter and the feeling that you were robbed

AlanP_2

RealtimeBlues wrote: »

Open a SIPP with HL or similar, transfer all your pensions to it.
Choose what funds and shares you want in your portfolio depending on your risk tolerance, and enjoy the ride.
Of course read and learn and ensure you don't loose valuable bonuses etc by transferring
Or take a lucky dip and hope you get a great IFA and still end up doing above but several grand lighter and the feeling that you were robbed

I'm sorry but that is awful advice and doesn't answer the OPs question.

Moving to a DIY platform MAY be the best solution for the OP but I would suggest that moving it, choosing the funds and "shares" you want is a lot more lucky dip than using a professional to advise and guide you.

Do you feel robbed when you use a mechanic, builder, electrician or plumber? They are all easy to DIY.

OldMusicGuy

AlanP wrote: »

Do you feel robbed when you use a mechanic, builder, electrician or plumber? They are all easy to DIY.

If any tradesperson does a poor job, I can try to get my money back. IFAs/FAs always win no matter what the quality of their advice is (look at wealth management firms for example). There is no downside for them. Only egregious rule breaking will be punished.

And for the things I can DIY, I do a better job than tradespeople because I take my time over it (you should see the quality of the window frames I have just painted).

So I do feel that paying an IFA is an unnecessary expense where they always win however good or bad the service. Very different to employing tradespeople. But that's me. Like I said, not everyone feels the same way, and not everyone can paint window frames to the quality that I can. Similarly, not everyone feels confident DIY investing, in which case using an IFA makes sense.

Another problem is that good IFAs can be hard to find.