Royal london pension

dunstonh

You don't pick Royal London because it is the cheapest.  Although it is not far off.    It is a mainstream option with 100% FSCS protection with no upper limit (unlike a SIPP).   In this case, the tiered charge is 0.40%.   That is not expensive.   There is also the mutual profitshare rebate which is about 0.15% a year.  So, net, it equates to around 0.25% p.a.   You have the governed portfolios (which effectively meet the FCAs pathways requirements for income drawdown - i.e. it does it for you) or you can have in-house managed funds or index trackers.

It is a good option for low knowledge consumers who are after a simple option that allows every drawdown method.    As it's not a SIPP with 30,000 investment options, it won't offer the best outcome.  However, it won't offer the worst either.  it will pretty much come in middle of the road, as you would expect for a mainstream option.

[Deleted User]

ewaste said:

Deleted_User said:Given people can buy the world in a single “buy and forget” product and have it professionally managed for less than one tenth of what you are paying, 1.3% seems intolerable.  But if you really need an intermediary on an ongoing basis and don’t have a lot of assets then you pay for the pleasure.

I would be interested to know where I can get a SIPP or similar pension including fund charges for less than 0.13% for a typical DC pension? Never mind one professionally managed e.g. a cap weighted global index fund isn't by any stretch 'professionally managed' it's about as unmanaged as one can get.

HSBC FTSE All world costs 0.13%. 

While my platform is free (x-o), if you go with II, you will pay 240 pounds per year regardless of fund size and that includes free trades. Thats a couple of bps on a 1M portfolio.

So, you are correct and I was wrong, costs in the UK are a little higher at around 0.15% per year.  I am paying 0.1% total but not in the UK. Still, 0.15% is close enough to one tenth of 1.3% that it does not make any difference in substance.

Fund manager is “ HSBC Index and Systematic Equity Portfolio Management Team”.  Not only are they professionals but the required qualifications far exceed those of an IFA. 

HSBC is further relying on the professional services of FTSE Russel to build and maintain the index.  FTSE Russel is run by professionals.  CEO is Arne Staal, educated in Holland and US. He has a doctorate in Finance and is supported by a team of equally qualified finance professionals.   Its not a company which will go out of business next year or harvest your data to high street robbers before retiring like IFAs often do. 

If you really want to buy an active or a factor fund, the costs will be somewhat higher but should still be a lot less than 1.3% as numerous products are available.  Active funds are also managed by highly qualified professionals who are doing the job of selecting investments.  If you need an underqualified intermediary on top, only then would you go to an IFA for bog standard “ongoing investment advice” for an investment which is anyway managed by someone else. 
 

JOHNBOY42

dunstonh said:

You don't pick Royal London because it is the cheapest.  Although it is not far off.    It is a mainstream option with 100% FSCS protection with no upper limit (unlike a SIPP).   In this case, the tiered charge is 0.40%.   That is not expensive.   There is also the mutual profitshare rebate which is about 0.15% a year.  So, net, it equates to around 0.25% p.a.   You have the governed portfolios (which effectively meet the FCAs pathways requirements for income drawdown - i.e. it does it for you) or you can have in-house managed funds or index trackers.

It is a good option for low knowledge consumers who are after a simple option that allows every drawdown method.    As it's not a SIPP with 30,000 investment options, it won't offer the best outcome.  However, it won't offer the worst either.  it will pretty much come in middle of the road, as you would expect for a mainstream option.

As I said its all new to me and my IFA highly recommended Royal London and the governed portfolio ..... the fees appear ok so hopefully my returns will do good