True Potential - good idea or not?

Madeinireland

Hi,

I went to see an advisor today from True Potential on my final salary pension. He is going to get a transfer value from my pension administrators (This is a BT pension - section by way of exploring that as one possible option.

Apparently the costs of going with them if I were to move my pension fund to their platform is as follows....

A one off transfer advice fee probably capped at £5000
Using their balanced portfolio would be ongoing costs of 0.81% per annum
Platform costs of 0.4% per annum
On going advice costs of 0.5% per annum

My pension value is going to be in the region of £1m plus.

Having not ever had dealings with an financial Advisor before I’m just getting opinions on these costs? I’m aiming to see a full IFA advisor (the one from True Potential is restricted) as well in next couple of weeks.

Opinions welcome.

Thanks...

Albermarle

There are many other threads on this subject on this forum.
The obvious question is not the level of costs ( which look reasonably normal ) but why are you looking to give up a guaranteed monthly payment for your retirement and throw yourself to the uncertainties of the financial markets .Be ready for some sleepless nights !
Of course a Million Pounds seems a lot of money but what actual level of final salary payment are you thinking of giving up ?

Dox

Madeinireland wrote: »

Hi,

I went to see an advisor today from True Potential on my final salary pension. He is going to get a transfer value from my pension administrators (This is a BT pension - section by way of exploring that as one possible option.
I’m aiming to see a full IFA advisor (the one from True Potential is restricted) as well in next couple of weeks.

Opinions welcome.

Thanks...

Do you realise how tight the timescale is from getting a transfer value to taking a decision? The amount of ground an IFA has to cover is considerable - and 3 months is barely enough to do the job properly. Suggest you ask TP to hold off getting the transfer value until you've made a decision on who is going to advise you - and they can then apply on your behalf.

Pension_Geek

Dox wrote: »

Do you realise how tight the timescale is from getting a transfer value to taking a decision? The amount of ground an IFA has to cover is considerable - and 3 months is barely enough to do the job properly. Suggest you ask TP to hold off getting the transfer value until you've made a decision on who is going to advise you - and they can then apply on your behalf.

And you might only get one CETV free a year, after which a fee can be charged.

Madeinireland

Hi,

Thanks for your responses. The value of pension being given up will be in the region of £30k.

With regard to the tight timescale... if I get a transfer value now (which is going to take a few weeks anyway) I presume any IFA can advise on that valuation so don’t quite understand why I can’t just let them get the valuation done at this stage while I get the right adviser if indeed it’s not them.

I understand a further valuation would be chargeable (apparently £150) so I guess I can just take that hit if required.

Thanks...

Madeinireland

Also - As to why I would give up that level of benefit....

I also think there are good benefits in doing it - such as inheritance, flexibility on income, removal of danger of company going bust etc.

I’m not saying that I will do it just yet but I do feel I need to explore the option at least. My family history does not suggest I will live a very long life so I feel it may be a risk worth taking f the terms are good.

Thanks...

beamyup

£30k per annum pension = worth > £1M?
Does it have good benefits on top of the £30K? is it available at an early retirement age?

If you did go ahead with a transfer (see comments above on that)

That is a HUGE fee for the IFA!
(And I assume if the pension stays where it it - that's probably 0 fee for the IFA.)

For the IFA - £5000 initial fee plus at least £5000 per annum until you run out of money or die!
Maybe more than that if your fund grows.

Plus very high platform and fund costs of at least £12,000 per annum.

I don't know why the IFA thinks you should pay ANYTHING LIKE that %age for the platform and fund fees.

Over 10 years that's £170,000 of fees! and that doesn't include the effect of what happens if the fund value rises!

Personally, if I was to go ahead with the transfer I would be looking to decimate those fees and costs (this is MSE after all).

Pension_Geek

beamyup wrote: »

If you did go ahead (see comments above on that)

That is a HUGE fee for the IFA!
(And I assume if the pension stays where it it - that's probably 0 fee for the IFA.)

For the IFA - £5000 initial fee plus at least £5000 per annum until you run out of money or die!
Maybe more than that if your fund grows.

Plus very high platform and fund costs of at least £12,000 per annum.

I don't know why the IFA thinks you should pay ANYTHING LIKE that %age for the platform and fund fees.

Over 10 years that's £170,000 of fees! and that doesn't include the effect of what happens if the fund value rises!

Personally, if I was to go ahead with the transfer I would be looking to decimate those fees and costs (this is MSE after all).

If anything, I think its pretty low. The PI cover would be very expensive.

beamyup

Pension_Geek wrote: »

If anything, I think its pretty low. The PI cover would be very expensive.

The initial £5K seems "fine" - but that's the only thing - not the ongoing or fund costs.

Madeinireland

He said the normal initial fee is 3% but on such a large fund they would cap to £5000.

On reflection I agree the fees do look high to me - but I’m not knowledgable about the work level and risk that they are taking. I probably won’t take the risk but I’m still going to investigate.

The other benefits are that it’s index linked (CPI) and 50% spouse pension - she is 6 years younger than me. It would be payable when I want to take it as I’m 58 anyway.

Thanks...

Albermarle

You can turn this on it's head and find an annuity checker on google.
Put in your age , what income you want ( £30K) , that you want it to increase by CPI and a 50% spouse pension . You might be surprised by the amount of money they would want to set up an annuity on those terms . probably at least £1 million …..