Pension fund fees?

BrixMorta

I'm currently paying the above fees on a pension pot of £360k

They seem quite high can anyone advise?

as below

Thank you

Nick

Annual Charge 0.25%
Intermediary 1.09%
Investment charges 1.00%

Total annual charges for 2018 on a £360k fund = £9,074

wjr4

That is high. Which provider is the pension with and do you mean IFA charge? That’s an odd amount to be charging.

BrixMorta

Aegon and I'm assuming the intermediary is the IFA?

Albermarle

A 0.25% annual charge is pretty normal .
A fund charge can be anything from 0.1% to 2 % , depending on what the investment fund is.
An ongoing IFA charge is normally between 0.5% and 0.7%

So the question is why is the IFA charge high and what benefit are you getting from having an IFA at all? do you have regular reviews ? do they help with other financial issues etc

Plus you need to tell us what the fund is before any sensible comment on it can be made.

dunstonh

You can get the intermediary charges down. The dominant figure for IFAs is 0.50% p.a. Although 1% is more common on smaller values. 1.09% is a very strange figure. However, Aegon's reporting of charges does throw up some strange figures as they take the fees paid in monetary terms over the year and then divide it against the current value at the end. This distorts the percentage figure. As 2018 values fell, this pushed the percentage figures up higher than they actually are. If values rise, the percentage figures would fall. So, whilst Aegon are saying 1.09%, that probably means 1.0%.

The platform fee is right in the ballpark.

The investment charges are normal if 100% managed funds but you tend to find 0.5% ballpark is more common (the lower the risk, usuallyt the lower the charges. So, heading to 0.3% if lower risk).

beamyup

If you want to reduce your costs then you can, of course as usual the highest amount is going to the IFA.

I suggest you read a lot of the threads on here about the pros / cons of the different approaches.

Have you considered DIY SIPP? you could get your total charge to less than 0.5% easily if you wanted to.

Have you asked the IFA to reduce charges to say 0.25%?

fred246

I was sorting through some paperwork the other day. Included was my pension paperwork from the 1990s. I must confess that I hadn't actually ever read it. My IFA was a family member and I did actually trust IFAs at that time. The last page (as it always is) was the commission page. It was quite unbelievable how one agreement could trigger commission payments for many years to come with no extra work being required. I am always being told how IFAs have changed totally since then. They charge you £3924 each year to 'review' your pension. Could you please ask them how long that review takes. None of the IFAs on here will tell me. I have a suspicion that our so called reformed characters aren't actually that reformed.

cfw1994

fred246 wrote: »

I was sorting through some paperwork the other day. Included was my pension paperwork from the 1990s. I must confess that I hadn't actually ever read it. My IFA was a family member and I did actually trust IFAs at that time. The last page (as it always is) was the commission page. It was quite unbelievable how one agreement could trigger commission payments for many years to come with no extra work being required. I am always being told how IFAs have changed totally since then. They charge you £3924 each year to 'review' your pension. Could you please ask them how long that review takes. None of the IFAs on here will tell me. I have a suspicion that our so called reformed characters aren't actually that reformed.

Your hatred of IFAs is well known on this board.
It does, however, still seem to stem from things 20-30+ years ago.
Today there are FAR fewer FA/IFAs than there were back then, & I beleive they are under far closer scrutiny.

In short, the world has changed. Although your views have sadly not.

I too am 'suspicious' of my need to use IFAs for on-going work...but the world we live in now allows me this luxury: it is very easy to compare funds, performance, make choices, for those of us with an interest in these things.

What is perhaps harder for many people is framing thoughts on finance more broadly: approach to risk, insurance options, family & inheritance plans, tax efficiency planning, etc etc....& those are areas I bet many can benefit from at various points.

Thanks again to those IFAs who do inhabit these boards with your gems of wisdom: most of us genuinely appreciate them!

MEM62

fred246 wrote: »

Included was my pension paperwork from the 1990s.

fred246 wrote: »

I did actually trust IFAs at that time.

And you don't now? Back in 90's you probably had much more reason to be cautious than you do now.

fred246 wrote: »

I am always being told how IFAs have changed totally since then.

The industry and the legislation that governs it has changed significantly.

fred246 wrote: »

They charge you £3924 each year to 'review' your pension. Could you please ask them how long that review takes. None of the IFAs on here will tell me.

Who are 'they' and why are you quoting that particular number? There is no fixed fee as charges would be different depending of each clients' circumstances. And your assumption that is time the only factor on which charges are based is flawed.

fred246 wrote: »

I have a suspicion that our so called reformed characters aren't actually that reformed.

Well it is much easier to hang onto prejudice than it is to let go of it. If you looked at the industry objectively and as it is today your view would change.

greggymagic

MEM62 wrote: »

Who are 'they' and why are you quoting that particular number? There is no fixed fee as charges would be different depending of each clients' circumstances. And your assumption that is time the only factor on which charges are based is flawed.

I presume it's the 1.09 intermediary charge on the 360k hence £3924