Stay with SJP or move to Prudential or somewhere else...

sunmax23

I'm looking for some advice please...
I have a balanced portfolio pension fund with SJP that doesn't appear to be doing very well at the moment & I will have a 1.5% penalty if I wish to transfer out.
I have had meetings with a couple of IFAs to try to establish what options are available to me - The Prudential Pension looks quite appealing, however, I'm not sure how their smoothing mechanism works and if there are any risks at all? One IFA advised that the Pru would be a good option and the other IFA advised against transferring all of my pension into this fund.
I just want something that will provide me with a decent return and at the moment, I am just totally confused with it all.
Do I stay with SJP in the hope that their fund will improve while I'm tied in with a penalty or would I get a better return by paying the penalty now and moving somewhere else.

Thrugelmir

sunmax23 wrote: »

I have a balanced portfolio pension fund with SJP that doesn't appear to be doing very well at the moment

What timespan is at the moment? Investments fluctuate in value. Not like a bank deposit account where the balance incremently increases. Few funds can withstand a general market fall. Though there'll be instances where managers have taken a contrarian view that'll do well. Using hindsight is easy after the event to identify these opportunties. Real art is to find them beforehand as that's the way of benefitting.

sunmax23

I've been with SJP for 2 years - I'm trying to establish if it would be best if I transferred to a different company?

tacpot12

sunmax23 wrote: »

I've been with SJP for 2 years - I'm trying to establish if it would be best if I transferred to a different company?

Almost certainly, given SJP's reputation for
charges. Give they want 1.5% of your money to let you leave, I would say this reputation is well founded!

Will they charge you less to leave once you have been with them longer? If so, it might be worth staying with them for a little longer.

I would not move to the Pridential's With-Profit's fund; this is the only fund that I aware of as having a 'smoothing' effect. The problem is that the fund's performance is too difficult to interpret- you can't compare it to any other fund due to how the final bonus is given to you. I would select pension that allows you to see the performance of the underlying funds easily. SJP does not publish the performance of its funds publicly (as far as I know), so it fails this test.

dunstonh

Prudential pension suggests low understanding of pension and perhaps a lazy adviser. At the end of the day, I would only use the Pru pension as a matter of last resort if I could not get the client to understand why its not a good idea.

There is nothing wrong with it as such. Just overpriced and a bit lazy to jump to that solution without an attempt to educate you first. Some advisers do use it as a solution for almost everything as it can be easier than putting the effort in to teach you.

jamesperrett

tacpot12 wrote: »

SJP does not publish the performance of its funds publicly (as far as I know), so it fails this test.

Most of their funds seem to have prices available on Trustnet but there is very little further information about them. They seem very secretive.

sunmax23

HI it's the Prufund Growth I'm not sure if this makes any difference? I am a novice when it comes to Pensions and this will explain when I look at the Pru it does appear to be producing around a 6% return for investors compared to what I seem to be getting with SJP.

Pension_Geek

sunmax23 wrote: »

HI it's the Prufund Growth I'm not sure if this makes any difference? I am a novice when it comes to Pensions and this will explain when I look at the Pru it does appear to be producing around a 6% return for investors compared to what I seem to be getting with SJP.

Prufund growth will have an expected growth rate of 6% give or take. You'll pay a platform fee, fund AMC and presumably an ongoing advice fee. Depending on your fund vlaue thatll add up 1.5-2%. If you want to just have it in a fund it may be an indea, but I concur with the above, Prufund is an expensive and rather lazy option.

The EGR is not guaranteed either! And it may be changed at any time.

sunmax23

I've been quoted 1.425 overall charges for the PruFund Growth and I'll have to pay approx £15k to exit SJP now - my pension fund has only increased by approx £12k over the past 12 months. I am receiving conflicting information from several IFAs at the moment and really unsure as to which option I should take

AnotherJoe

sunmax23 wrote: »

I've been quoted 1.425 overall charges for the PruFund Growth and I'll have to pay approx £15k to exit SJP now - my pension fund has only increased by approx £12k over the past 12 months. I am receiving conflicting information from several IFAs at the moment and really unsure as to which option I should take

Multiple problems with that.
1. The last 12 months have seen a standstill or even drop in overall fund values (generalising, obviously there are exceptions) , especially if by "the last 12 months" you mean an annual review for 2018 which was a poor year for most investments, and not literally the last 12 months as theres been a recent uptick in world markets

2. "only" a £12k increase is meaningless. Is that from £50k, £100k, a million?

3. If you are expecting an increase every year, and that to be least 6% as well, you have a highly unrealistic view of how investments work.
4. Those charges seem very high.I think you could get half that. Much of investment performance is about charges. You are looking at going from a very high charging provider to a slightly less high paying one.


From what i know of SJP they disguise charges by calling them exit fees but they do decrease. I would check when the fee drops, switch then if its soon, and in the meantime educate yourself about the uncertainties of the stock market, at present you seem to be in a frying pan into fire proposition.

sunmax23

I appreciate the points that you have raised

the £12k is on a pension fund of approx £880k

As I mentioned, I have no experience at all regarding pensions and I had hoped that I could rely upon advice provided by IFAs.

I would welcome any further information you could provide with regards to charges / best providers/ etc.