Zurich Pension Charges

Bianchiintenso

Just wondered if anyone could throw light on these charges and the meaning of refund of annual charge please?
Annual charge is 0.75% (This is taken by Zurich for running your plan)
Refund of Annual charge is 0.75% (This is added back into your plan by Zurich to offset annual charges)
also fund charges appear to be reasonable to my untrained eye @
£7.48 p.m. policy charge
0.18% for managed fund and
0.15% for equity fund.
Fund value £350k
Does anyone have any info that could help/throw light on this Charge then Refund of charge?
Thanks in advance

dunstonh

Some of the old Allied Dunbar plans had an effective 0% AMC if you made them paid up. Their charges were high but they levied them against the contributions.   If the plan was no longer receiving contributions they would rebate the AMC.
So, is yours an old Allied Dunbar plan?

Zurich also have legacy plans form other insurers on their books too.

Bianchiintenso

Thanks Dunston, yes an old AD plan, if that's the case I guess the policy charge and 0.18% and 0.15% are fairly reasonable charges?

dunstonh

Bianchiintenso said:

Thanks Dunston, yes an old AD plan, if that's the case I guess the policy charge and 0.18% and 0.15% are fairly reasonable charges?

Better than reasonable.   You would be hard pushed to find let level of charges on the market today.  It may just about be possible but you are right at or near the top of the table when it comes to low charges.

Bianchiintenso

Wow, that's unexpected, makes me think I've missed something, is that possible?

dunstonh

Bianchiintenso said:

Wow, that's unexpected, makes me think I've missed something, is that possible?

It's a quirk of the product.  It happens every now and then.     

The issue with the old AD version you have is that they charged a heck of a lot but it was based on the money you added. (capital and accumulation units and bid/offer spreads)  And you had the AMC on top.   However, for some reason, someone in their product development team decided that people not paying in should not pay an AMC.       This goes back to the days when someone started a product, they nearly always saw it through to the end.  So, they probably never saw it as an issue.  I have only ever seen that charging method on their regular contribution plans.

If you were still paying into it, it would be expensive.    We have come across a number of these over the years and compared paid up with regular contributions and the software backs it up.   We have nearly always told the people to stop paying in but keep it there and redirect contributions to a new plan.

Bianchiintenso

Most helpful Dunstonh, really appreciate you taking the time to explain

Bianchiintenso

I was thinking further on this last night and given the 'good' position I am in re charges mentioned above, I can't understand how 3 years ago an IFA recommended I move to a different platform Novia which has/had charges at the time of:
Annual charge 0.20%
Advisor charge ongoing of 1%
Discretionary Fund manager charge of 0.36%
Advisor charge Initial of 1.5%
plus various Investment Manager Charges quoted as well.
Would this be classed as 'advice in my interest?' Nothing seems to add up to me that I would/could be better off by taking the IFA advice in this instance. If anyone has an explanation that a certain scenario would mean it's good advice I'd be interested to hear/learn?

dunstonh

Would this be classed as 'advice in my interest?' 

Wealth management advisers hoover up assets.  Novia is frequently used by wealth managers.  So, maybe that is it.

Ex AD funds are not the greatest performers on the whole.  So, "maybe" they felt returns offset the charges.   It's hard to prejudge a case without seeing it but usually, with ex AD plans with this charging structure, we say to leave alone (although may fund switch within the pension) until its time to draw it.

Bianchiintenso

I note with interest your previous comments about steer clear of anyone with 'wealth' in their title, The 'advisor' was an IFA according to his title. His pushing of Novia seemed a little at odds with his IFA status. I guess it's up to everyone to do their own due diligence.

dunstonh

Bianchiintenso said:

I note with interest your previous comments about steer clear of anyone with 'wealth' in their title, The 'advisor' was an IFA according to his title. His pushing of Novia seemed a little at odds with his IFA status. I guess it's up to everyone to do their own due diligence.

Unfortunately, there are some IFAs that really shouldn't be using the IFA tag.   There has been some improvement on that in recent years with compliance firms and the FCA themselves pushing firms to drop their IFA status to become FA.   The Wealth Management tag is often a giveaway but its not the only thing.    The use of a DFM on certain platforms that will not offer terms to general practitioner IFAs is a good one. (i.e. platforms that require advisers to place £xx millions with them either exclusively or the majority).