Scottish Equitable v Zurich

agentgibbs_2

I have an old company pension with Scottish Equitable and am currently contributing to a Stakeholder pension with Standard Life (my employer also contributes to this). I will be eligible to collect my state pension in 5 years time.

My IFA has advised me to transfer my SE funds (which are subject to the vagaries of the stock market) to Zurich UK ZP fund Protected/Guaranteed (he knows I'm shy of the stock market), although the SE projected figures are slightly higher than the Zurich ones (a few hundred).

Is the Zurich fund a good one?

dunstonh

Zurich is an interesting choice. What reason has the IFA given for using Zurich and not a number of other providers?

Dont read anything into what I am saying its just that I average around 200 pension transfers a year and have yet to recommend Zurich as they never seem to come out on top. So, I am just interested in the reasons given.

Of course, it also depends on what type of pension transfer this is. A section 32 buy out bond would possibly give a different outcome to say a stakeholder or personal pension.

EdInvestor

agentgibbs wrote: »

I have an old company pension with Scottish Equitable and am currently contributing to a Stakeholder pension with Standard Life (my employer also contributes to this).

Have you considered moving the SE money to Standard Life? Pensions run through employers normally have lower charges than those set up by individuals.

My IFA has advised me to transfer my SE funds (which are subject to the vagaries of the stock market) to Zurich....

If you wish to stop the money being exposed to the stockmarket, all you have to do is use the SE internal switching mechanism to move them to a no-risk (Sterling or money fund which earns interest) or lower risk (eg gilt or bond) fund. There is no need to transfer the money to another company.Of course your advisor will not make any money if you do an internal switch.

although the SE projected figures are slightly higher than the Zurich ones (a few hundred).

What figures do you mean here?

If the SE pension attracts high charges, then a transfer might be appropriate.But the obvious first thing to look at is the charges on the existing SL stakeholder pension.How do they compare with the SE and the proposed Zurich pensions?

BTW if you are worried about the stockmarket, have you checked what your money in the SL stakeholder is invested in? Presumably not, otherwise you would know about internal fund switching.

agentgibbs_2

Dunstonh:

My IFA just said he thought Zurich would be a good choice for me

I don't know what you mean by a Section 32 buy out bond.

EdInvestor:

I have taken on board all your comments and will make the necessary enquiries.


Thanks to both for your comments

dunstonh

Pensions run through employers normally have lower charges than those set up by individuals.

Possible option but fund range is likely to be weak and comparable fund is not likely to be available on a group stakeholder.

If you wish to stop the money being exposed to the stockmarket, all you have to do is use the SE internal switching mechanism to move them to a no-risk (Sterling or money fund which earns interest) or lower risk (eg gilt or bond) fund. There is no need to transfer the money to another company.Of course your advisor will not make any money if you do an internal switch.

If you are that concerned about an adviser earning from it, why recommend that it goes into the Standard Life scheme as an unknown adviser will earn from it then, without you getting any advice from them.

EdInvestor

dunstonh wrote: »

If you are that concerned about an adviser earning from it, why recommend that it goes into the Standard Life scheme as an unknown adviser will earn from it then, without you getting any advice from them.

I am not recommending anything, just pointing out one reason why an advisor might choose one particular option rather than 2 existing ones which should surely at least be checked out first.If he's done that already, he should be able to show the research to the OP and justiufy the Zurich selection.The GPP advisor is already earning from the OP's company scheme.

dunstonh

Its pretty easy to guess why SL wasnt chosen though. The fund choice on the group stakeholder almost certainly would be the reason.

EdInvestor

dunstonh wrote: »

Its pretty easy to guess why SL wasnt chosen though. The fund choice on the group stakeholder almost certainly would be the reason.

Here's the standard stakeholder selection:

http://uk.standardlife.com/content/pdf/slac/spp5.pdf?show=true

Can't see how that would be unsuitable for a risk averse investor coming up to retirement, indeed there are a selection of funds especially for such people and the charges are low at 1%.

of course not all GPPs may have all the stakeholder options,but if so the IFA should surely have explained that.


There are various Zurich Protected Guaranteed funds, here's one:

http://www.trustnet.com/pen/funds/?fund=8685

70% in shares, 30% in cash.(You could do this yourself quite easily of course

Mostly funds with a guarantee tend to confiscate the dividends on the shares and possibly even the interest on the cash (or part of it) to pay for the guarantee.

Is that the case with this fund?

As with the Guaranteed Equity Bonds, you usually end up making little money out of this kind of investment.