Pension Advisor Fees

Susan82

Hi all, 

I'm hoping you might be able to help. I have a pension with Royal London (governed portfolio 7) which was set up by a friend of mine who is a financial advisor. There are 'advisor charges' of 0.5% on the pension, which initially didn't cost much (when there was no money in the pot!), but now after a few years (and £20,000 in the pot) are starting to cost £100+ a year. We have a yearly meeting with my friend to discuss our investments etc, but that's all, I think. I'm thinking as the years roll on this will begin to get very expensive and am obviously beginning to question the value etc. However, I didn't know whether this was the norm or whether I should remove the advisor fees and move to a paid yearly consultation? Not entirely sure how this all works really...!

I'm generally pretty financially savvy and it appears the pensions are pretty straightforward (I'm paying a management fee to Royal London too). 

Any help/advice/insight would be greatly appreciated. 

Thanks in advance, 

dunstonh

However, I didn't know whether this was the norm or whether I should remove the advisor fees and move to a paid yearly consultation? Not entirely sure how this all works really...!

People get the choice of ongoing or transactional.   Many advisers won't offer ongoing servicing on small values as it's not cost-effective.  You are probably loss-making to the adviser.

You don't really need one with 5 digits of value.  so, feel free to end the ongoing servicing.

ChainsawCharlie

Surely, you will be making money over the years, and watching your pot grow, mostly thanks to the advice you are paying for  which is a percentage of your pot size, so fees obviously proportional.
Its obviously paying for itself

Albermarle

Normally financial advisors are not interested in clients with this level of money, and if you could find one the minimum ongoing charge would be 1% ( probably more ) and a one off annual discussion would probably be £500 minimum . 
So your friend is doing you a favour really . £100 pa is peanuts and your pension investment could gain/lose that amount in the blink of an eye .
The other point to be aware of is that Royal London have a policy to only work via a financial advisor . Although you can do some things yourself , they will not let you change somethings directly . If you drop the advisor, then it will probably be better to change pension provider.