IFA Sanity Check / Fund advice.

Fly100

Hello all,
Could you offer some advice please. I recently spoke to an IFA about moving a mothballed Pension from Aegon / Retire Ready for better performance / better charges. Its currently invested in the External Balanced Collection (ARC) Fund. Approx £70k His advice was it was a below average Investment with moderate charges and we should consider moving it. Covid arrived and further discussions have not continued for various reasons. Like everyone, time is on our hands, and having spent time here reading and trying to learn / understand terms and funds is Vanguard gets many a mention. I have looked at their site as I already have L/S 60 with them.
Ive tried to compare the Targeted Retirement 2035 fund against the Aegon Fund I already have, with my limited knowledge Im finding it hard to find the any large differences between the two other than different Crown Ratings.
Could you offer some advice and point out the main points I should be reviewing please.
Many thanks,
FLY

  

Clive_Woody

What charges are you paying on your Aegon pension?

Fly100

Clive_Woody said:

What charges are you paying on your Aegon pension?

its 0.40% according to the Fact Sheet.

Albermarle

I recently spoke to an IFA about moving a mothballed Pension from Aegon / Retire Ready for better performance / better charges.

To be pedantic., how can it be 'mothballed' if it is still actively investing your money and charging for it ?

its 0.40% according to the Fact Sheet.
If that is 0.4% all in , including the fund and overall pension charge that is pretty competitive. It might be worth double checking that by phoning them as sometimes there are hidden discounts that your ex employer maybe negotiated. Or you might find this is not the only charge. 
The IFA will probably charge 1% pa ongoing and maybe say £1500 for setting up a new pension , which may itself cost more than 0.4%

dunstonh

Ive tried to compare the Targeted Retirement 2035 fund against the Aegon Fund I already have, with my limited knowledge Im finding it hard to find the any large differences between the two other than different Crown Ratings.

Ingore crown ratings.

Chances are that the Vanguard fund is more expensive.   Aegon in-house funds are available from 0.05% (some at 0.1%)  Aegon's platform is often set up on special terms specific to the IFA.   Mainly as its not very good. So, costs reflect that.   So, you could be all in around 0.3%.pa.   However, it depends on which distribution channel was used and what deals were applied.

moving a mothballed Pension

Where do you get mothballed from?   If you were to move it to say Vanguard, would you immediately refer to that as mothballed as you would be doing more or less the same thing as it is doing at the moment (i.e. both investing in multi-asset funds).

zagfles

Remember to compare total charges, fund + platform (if applicable) + IFA (if applicable).

Fly100

Thanks for the input, Mothballed may have been a poor choice of words on my part. Are there any better performing Companies out there. the IFA wants 5% of the pot to continue, and that's not going to happen.
I was hoping for it to perform better ( allowing that Covid has depressed alot of things.)
Thanks again. 

Albermarle

You have to be clear in your mind to split the pension provider from the investment within the pension . Although in your case the same company provides both, the difference is still very important .
The pension provider organises contributions, withdrawals , tax etc but your money is in the investment.
So you could have a efficient provider with a modern fast website etc but the investment could still do poorly . Or an archaic website with an investment that does well.
One difference between providers is that some have a much larger range of investments available than others but that does not mean it is easy to pick better investments . This only comes from experience/knowledge/luck . 
In your case one possibility is stay with Aegon but change the what your money is invested in .

[Deleted User]

. "the IFA wants 5% of the pot to continue," -  That is £3,500, isn't it? What is he proposing to do for that you couldn't do as well yourself, Fly100?

Fly100

ZingPowZing said:

. "the IFA wants 5% of the pot to continue," -  That is £3,500, isn't it? What is he proposing to do for that you couldn't do as well yourself, Fly100?

Thats why I'm here trying to learn as much as possible, 5% is alot of money, his direction hasnt been presented to me as yet as its a fee upfront. His only comment is the Aegon one is 'Below Average'.

dunstonh

Are there any better performing Companies out there.

Companies do not perform.  The company just does the administration.      Most modern pensions offer 30,000 different investment options nowadays.   Being whole of market, they can offer the same investments as everyone else.  So, hold the same investment with 10 different providers and you get the same return.

I was hoping for it to perform better ( allowing that Covid has depressed alot of things.)

Covid has only been a small blip so far and many are now back to where they were before Covid (some more, some not far off).  Is there a problem with what you have?

5% is alot of money, his direction hasnt been presented to me as yet as its a fee upfront. 

Of course, he won't present the advice as you could the just take the advice and not pay him.  Although 5% is a lot.  2% would be closer to ballpark expectation.

 His only comment is the Aegon one is 'Below Average'.

Which is a fair statement.    However, we still use them for simple stuff because of their low charges. We don't use them with serious investments though as they are below average.     Remember that this is talking about their software and admin.