Another (but different) DB Transfer Topic

dunstonh

What are the thoughts on Pru and others like them versus lower cost SIPP options with lower charges.

Pru's option isn't great.  It is typically used to access the Prufund as they do not make that fund available elsewhere.    If an IFA wanted to use conventional unit linked funds then they would use a whole of market platform that is bother cheaper and better.

I have also read in multiple places that only 45% of managed funded return more than a tracker.

Dont take much notice of that at this stage as that is a whole different discussion and not as simple as you think.

Also what should I expect from my adviser if I am paying him 0.5% for remaining in the same fund all year. 

Probably very little unless you are using them for wider planning and to act as a sounding board until you are more comfortable.   

JohnTbye

Thanks again, much appreciated. No notable relationship or pre knowledge of adviser. 

I would not drop him as I do believe in paying for his work, he is only asking for ongoing fee and has told me I can walk away. I do need him to meet the advice requirement for transferring out of DB. Another point to note is that he doesn’t have the qualifications, he has to go to 3rd party. He is in a larger company and is listed on IFA website.
Is it acceptable for me to tell him of my desire to use another lower cost SIPP fund and then leave it there so don’t need ongoing support.

fjh

I too hold Pru funds on advise of a previous IFA.
One danger to be aware of ( I hold

PruFund Cautious Fund Series E

PruFund Growth Fund Series E ) is I have found out if you wish to sell then you have to give instruction then wait 28 days for the sale 'price' to be struck- if the market in that 28 days has gone against you you cannot cancel/change your mind- This was not made clear to me or a few colleagues that did similar transfers to a SIPP with the same IFA. Question would you sell now in the current climate and wait 28 days to find out the price- think what can happen in 28 days !

dunstonh

Is it acceptable for me to tell him of my desire to use another lower cost SIPP fund and then leave it there so don’t need ongoing support.

You can give any instruction you like.  The IFA will counter unreasonable instructions but plenty of people give instructions to follow.  It could be responsible or ethical investing or avoiding a provider you do not like or it could be your cost focus.    

OldMusicGuy

JohnTbye said:

Thanks everyone, great feedback and learning for me. I should add that my adviser worked almost 25 years with Prudential and his own pension is with them. One of the reasons that I want to dig deeper.
Your comments are also making me question my goals, which is good.
Any other “questions” for my adviser ?

No questions for the adviser but a suggestion for you You have no knowledge of investing, are questioning an IFA (who presumably you do employ because you have little knowledge) and are prepared to move from the gold plated security of a DB pension to having 1m in a DC pot. You must spend some time educating yourself on investments and also you must set some clear goals.

You are making all the naive statements of an uneducated newbie. You are like a learner driver about to be handed the keys to a Ferrari F40. A 1m pension pot is that Ferrari to most people. Your experienced IFA has made a recommendation but you think there must be something "better" (but you don't know what) based on a quick look at historic performance (which is no guide to future performance...). And you have the idea that you can switch into cash to avoid crashes, which is a really stupid idea (I know because I felt the same 5 years ago when I didn't know any better).

What you must do is to spend some time understanding how investing a pension portfolio works. Read books like "Investing Demystified" by Lars Kroijer and "DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing" by John Edwards. Also look at the PensionCraft YouTube channel, and read the Monevator website for ideas. This will help YOU understand the questions you need to ask your IFA to help you meet your objectives. If you don't want to do this, stay in the DB pension.

Also, you will need clear financial and investment objectives otherwise you will fall prey to portfolio envy (like you are already are doing with the PruFund recommendation). 

FWIW I did this myself. I never had the security of a DB pension but I do have a reasonable DC pot. I learned all of the answers to my questions doing what I recommended above and I now manage my own portfolio. I have just seen my portfolio achieve exactly the objectives I set through one of the worst downturns in history.  

[Deleted User]

JohnTbye said:

Thanks again, much appreciated. No notable relationship or pre knowledge of adviser. 

I would not drop him as I do believe in paying for his work, he is only asking for ongoing fee and has told me I can walk away. I do need him to meet the advice requirement for transferring out of DB. Another point to note is that he doesn’t have the qualifications, he has to go to 3rd party. He is in a larger company and is listed on IFA website.
Is it acceptable for me to tell him of my desire to use another lower cost SIPP fund and then leave it there so don’t need ongoing support.

You say your IFA is  “only” asking for an ongoing fee? If the 3rd party he goes to is Pensionhelp, it charges a flat £3,000. I don’t think Prudential have their own pension transfer specialists. 
Do you know in your own mind how you shall proceed if the recommendation is negative? Important you should, otherwise you risk paying £11,000 for advice you may not want. 

BritishInvestor

OldMusicGuy said:

JohnTbye said:

Thanks everyone, great feedback and learning for me. I should add that my adviser worked almost 25 years with Prudential and his own pension is with them. One of the reasons that I want to dig deeper.
Your comments are also making me question my goals, which is good.
Any other “questions” for my adviser ?

No questions for the adviser but a suggestion for you You have no knowledge of investing, are questioning an IFA (who presumably you do employ because you have little knowledge) and are prepared to move from the gold plated security of a DB pension to having 1m in a DC pot. You must spend some time educating yourself on investments and also you must set some clear goals.

You are making all the naive statements of an uneducated newbie. You are like a learner driver about to be handed the keys to a Ferrari F40. A 1m pension pot is that Ferrari to most people. Your experienced IFA has made a recommendation but you think there must be something "better" (but you don't know what) based on a quick look at historic performance (which is no guide to future performance...). And you have the idea that you can switch into cash to avoid crashes, which is a really stupid idea (I know because I felt the same 5 years ago when I didn't know any better).

What you must do is to spend some time understanding how investing a pension portfolio works. Read books like "Investing Demystified" by Lars Kroijer and "DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing" by John Edwards. Also look at the PensionCraft YouTube channel, and read the Monevator website for ideas. This will help YOU understand the questions you need to ask your IFA to help you meet your objectives. If you don't want to do this, stay in the DB pension.

Also, you will need clear financial and investment objectives otherwise you will fall prey to portfolio envy (like you are already are doing with the PruFund recommendation). 

FWIW I did this myself. I never had the security of a DB pension but I do have a reasonable DC pot. I learned all of the answers to my questions doing what I recommended above and I now manage my own portfolio. I have just seen my portfolio achieve exactly the objectives I set through one of the worst downturns in history.  

" I have just seen my portfolio achieve exactly the objectives I set through one of the worst downturns in history.  "
In the context of retirement planning and portfolio sustainability, given the brevity of the falls, the fact that high-quality bonds were (broadly) unaffected and also that inflation is muted I'm not sure the recent downturn can be classed as such (from a purely financial POV).

But agree with Kroijer and Monevator tips

dunstonh

BritishInvestor said:

OldMusicGuy said:

JohnTbye said:

Thanks everyone, great feedback and learning for me. I should add that my adviser worked almost 25 years with Prudential and his own pension is with them. One of the reasons that I want to dig deeper.
Your comments are also making me question my goals, which is good.
Any other “questions” for my adviser ?

No questions for the adviser but a suggestion for you You have no knowledge of investing, are questioning an IFA (who presumably you do employ because you have little knowledge) and are prepared to move from the gold plated security of a DB pension to having 1m in a DC pot. You must spend some time educating yourself on investments and also you must set some clear goals.

You are making all the naive statements of an uneducated newbie. You are like a learner driver about to be handed the keys to a Ferrari F40. A 1m pension pot is that Ferrari to most people. Your experienced IFA has made a recommendation but you think there must be something "better" (but you don't know what) based on a quick look at historic performance (which is no guide to future performance...). And you have the idea that you can switch into cash to avoid crashes, which is a really stupid idea (I know because I felt the same 5 years ago when I didn't know any better).

What you must do is to spend some time understanding how investing a pension portfolio works. Read books like "Investing Demystified" by Lars Kroijer and "DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing" by John Edwards. Also look at the PensionCraft YouTube channel, and read the Monevator website for ideas. This will help YOU understand the questions you need to ask your IFA to help you meet your objectives. If you don't want to do this, stay in the DB pension.

Also, you will need clear financial and investment objectives otherwise you will fall prey to portfolio envy (like you are already are doing with the PruFund recommendation). 

FWIW I did this myself. I never had the security of a DB pension but I do have a reasonable DC pot. I learned all of the answers to my questions doing what I recommended above and I now manage my own portfolio. I have just seen my portfolio achieve exactly the objectives I set through one of the worst downturns in history.  

" I have just seen my portfolio achieve exactly the objectives I set through one of the worst downturns in history.  "
In the context of retirement planning and portfolio sustainability, given the brevity of the falls, the fact that high-quality bonds were (broadly) unaffected and also that inflation is muted I'm not sure the recent downturn can be classed as such (from a purely financial POV).

But agree with Kroijer and Monevator tips

I'm with you.  I am not sure you can class the Feb-March falls as one of the worst downturns in history.  It was quick to fall but its only the third largest fall in the last 20 years.  It was also quick to recover.    Coming through the dot.com period would be more testing to investors.  Three years of decline in a row with the markets dropping by more than CV  and five after that to recover would be a greater test of drawdown strategy.

[Deleted User]

Well, I kind of disagree with the rest of OldMusicGuy's post in addition.
I wouldn't surmise the OP is an uneducated newbie learner driver but, if he is, that's no reason not to question his IFA. The advantage of reading any book dilutes with every new reader but it's interesting that one of the recommended titles is "Investing Demystified." because it seems to me there is no special mystique about investing £1m, £10m or £100k, the principles are the same. And there should be no "required reading" otherwise stick with what you have imo.

OldMusicGuy

BritishInvestor said:

" I have just seen my portfolio achieve exactly the objectives I set through one of the worst downturns in history.  "
In the context of retirement planning and portfolio sustainability, given the brevity of the falls, the fact that high-quality bonds were (broadly) unaffected and also that inflation is muted I'm not sure the recent downturn can be classed as such (from a purely financial POV).

But agree with Kroijer and Monevator tips

OK, I take back the hyperbole..... But I was happy to see my portfolio perform as I hoped it would through a downturn, and it's also doing what I anticipated as things came back up.