Should I stay or should I go?

alpinelynn

Good evening all.
I took out a personal pension with Friends Provident (the pension now belongs to Aviva) through an independent financial adviser in 1998. This pension was never reviewed by that adviser, who later in his career joined St James's Place but retired quite a number of years ago.
Now, with 11.5 years to go until my planned retirement date – ie two-thirds of the way through! – an SJP adviser has been to see me and has told me my Aviva pension is "underperforming", is "limited" and is "inflexible". This might have been better received by me after five, 10 or even 15 years, but 20.5 years have passed!
My gut instinct is that the fees SJP will charge to manage the proposed new pension are too high – 1.7% compared with the 0.77% I am currently paying. The adviser has assured me that the "superior investment returns" will more than compensate for the higher fees.
I've looked into it a bit and the adviser is right, the Aviva pension is rather limited; it is only split between two funds and there is no option for income drawdown. So maybe I need to transfer to another provider anyway. But which?
The whole thing is really getting me down. What started off as £100 a month in 1998 is now £276 a month and some years that is more than 10% of my gross income (I'm self-employed). So I don't want to be paying any more than I am already.
So should I stay with Aviva (perhaps change or increase the number of funds) or go?
Any advice would be very gratefully received. Many thanks.

ffacoffipawb

alpinelynn wrote: »

Good evening all.
I took out a personal pension with Friends Provident (the pension now belongs to Aviva) through an independent financial adviser in 1998. This pension was never reviewed by that adviser, who later in his career joined St James's Place but retired quite a number of years ago.
Now, with 11.5 years to go until my planned retirement date – ie two-thirds of the way through! – an SJP adviser has been to see me and has told me my Aviva pension is "underperforming", is "limited" and is "inflexible". This might have been better received by me after five, 10 or even 15 years, but 20.5 years have passed!
My gut instinct is that the fees SJP will charge to manage the proposed new pension are too high – 1.7% compared with the 0.77% I am currently paying. The adviser has assured me that the "superior investment returns" will more than compensate for the higher fees.
I've looked into it a bit and the adviser is right, the Aviva pension is rather limited; it is only split between two funds and there is no option for income drawdown. So maybe I need to transfer to another provider anyway. But which?
The whole thing is really getting me down. What started off as £100 a month in 1998 is now £276 a month and some years that is more than 10% of my gross income (I'm self-employed). So I don't want to be paying any more than I am already.
So should I stay with Aviva (perhaps change or increase the number of funds) or go?
Any advice would be very gratefully received. Many thanks.

My advice to you would be run, don't walk. Don't look back like Lot's wife. SJP's fees are excessive and very poor value for money. They even make Hargreaves Lansdown look cheap.

sheslookinhot

I would not consider paying 10% of your income on a pension to be excessive

BLB53

Whatever, steer clear of SJP - expensive and not transparent.

Have you considered a SIPP which you could manage yourself?

pensionpawn

alpinelynn wrote: »

Good evening all.
I took out a personal pension with Friends Provident (the pension now belongs to Aviva) through an independent financial adviser in 1998. This pension was never reviewed by that adviser, who later in his career joined St James's Place but retired quite a number of years ago.
Now, with 11.5 years to go until my planned retirement date – ie two-thirds of the way through! – an SJP adviser has been to see me and has told me my Aviva pension is "underperforming", is "limited" and is "inflexible". This might have been better received by me after five, 10 or even 15 years, but 20.5 years have passed!
My gut instinct is that the fees SJP will charge to manage the proposed new pension are too high – 1.7% compared with the 0.77% I am currently paying. The adviser has assured me that the "superior investment returns" will more than compensate for the higher fees.
I've looked into it a bit and the adviser is right, the Aviva pension is rather limited; it is only split between two funds and there is no option for income drawdown. So maybe I need to transfer to another provider anyway. But which?
The whole thing is really getting me down. What started off as £100 a month in 1998 is now £276 a month and some years that is more than 10% of my gross income (I'm self-employed). So I don't want to be paying any more than I am already.
So should I stay with Aviva (perhaps change or increase the number of funds) or go?
Any advice would be very gratefully received. Many thanks.

I took out my FP pension (my very first pension) 9 years earlier, in fact 30 years ago this month (where did the time go...) I was as depressed as you until Osborne's pension changes which meant that my pension was mine to manage and I wasn't starring down the barrel of a paupers annuity. So first of all how are you defining 'under-performing'? My FP pension has averaged 8.4% over the last 16 years which although is not fantastic, it's certainly hasn't under-performed. You quote values of '£100 a month in 1998 is now £276 a month' which very much sound like an annuity to me. If this is the case you can transfer to someone like HL and manage your pension through TFLS and drawdown. The fees may be higher however so can be the rewards. Over the last 18 months, not a great time for investments, my wife has seen over 15% growth pa! I have just migrated one 6 figure pot and will scrutinise the performance over the next 6 months before moving other pots. Don't panic, with 11.5 years to your planned retirement date, with wise choices and good fortune you could see your pot increase 3 to 4 fold. Remember, with drawdown your pot remains invested so will hopefully continue to grow well after you have commenced drawdown. There are many things I have learnt about finance, and particularly pension, over the years and we can't beat ourselves up for what we did / didn't do, or didn't know. All we can do is make the best of the time still to come!

gm0

SJP are indeed expensive vs DIY SIPP and some IFA options. There are contingent contribution transfer out fees on a "tail" over several years. You can't repent quickly for free after starting paying in.

Despite their sales success - they have a poor reputation here due to a strong focus on whole of market fully independent IFA (from actual IFAs and fans of the model) and on low cost DIY.

I looked at SJP and don't find their pension fund portfolio offer that attractive, on balance of performance, risk, fees, complexity/obfuscation. If I had a personal long term trust relationship with a specific individual IFA advisor - who happened to move there and change over to their business model - I *might* stay with them due to the value of that personal trust vs the drag and the need to rebuild. Absent an established trust - i.e. a new relationship - fully independent could be a better route for portfolio, fund and product guidance if you (and any spouse) don't fancy DIY.

I don't buy the idea that their proprietary pensions product outperformance offsets the higher fees. This is a classic case for "sounds great show me the data". Spoiler - they generally can't - like for like on assets and risk level. If you do persist with the conversation - do ask for net of fees data (extractable funds) specific to your fund comparison (vs it's actual charges - not hypothetical assumed retail ones and the relevant indices). Be suspicious of any sales graphs which will have "fee assumptions" for each data series which aren't actual lies but which may flatter the comparison and may not be what they superficially appear to be when you test the assumptions.

If you deal with them as a big brand "product sale" (like Audi in VAG group say) then they are what they are. It's not great. It's not terrible. It is expensive. There are worse choices out there. It is generally well appointed (FA + sales contact, reports on nice paper). But very often it is much the same thing (as a Skoda in my example) underneath. You can get the same job done for less or spend the fee money differently on a better solution. Good luck.

Albermarle

there is no option for income drawdown. So maybe I need to transfer to another provider anyway. But which?

As you say you will have to switch if you want to do drawdown in future , so you might as well do it sooner rather than later. There is a large choice and you can even stay with Aviva but with a more modern pension with more fund choices probably. Otherwise their competitor Standard Life has a user friendly website . Or if you want even more choice of investments you can open a SIPP with many different alternative providers.
If it is simply a pension that you want nd have no other complicating factors , normally a IFA/FA is not necessary . Some research on pension and reading the various threads on this forum will help you.