Shopping around for drawdowns...

fiddlerman

Age 69, living comfortably off state pensions and a final salary. Ready to move £90k over 3 pots into a drawdown, not accessing for 5 yrs....and looking to deal with £100k in cash isas. Interested in advice/experiences of shopping around. Done the govt Moneyhelper talk thru...really useful for understanding the whole landscape. Awaiting proposal from my ISA provider (restricted adviser).

I was thinking of trying an independent adviser and also looking into going to a pension provider like Fidelity, cutting out advisor.

Has anyone compared advice from more than one adviser ? Any tips/observations ?
thanks 

dunstonh

Has anyone compared advice from more than one adviser ?

An IFA should easily beat a restricted adviser.   However, personality and work ethic is something you cannot really compare in advance.

Using an IFA will allow monthly phased UFPLS. That option doesn't appear to be supported by DIY providers.   So, if that method is you preferred way, you would either need to adjust the frequency and do manual drawdown requests or use an adviser.

zagfles

Google snowman's spreadsheet to compare providers. If you use an IFA, worth doing a quick check here to see if they have any ombudsman decisions against them: https://www.financial-ombudsman.org.uk/decisions-case-studies/ombudsman-decisions

Albermarle

Ready to move £90k over 3 pots into a drawdown, not accessing for 5 yrs...

If you are not intending to access them for 5 years , then you are not actually moving them into drawdown .

I think what you mean is that you want to combine three DC pension pots into one , with a provider who offers a drawdown facility when you require it at a later stage ?

fiddlerman

Thanks for all comments. Albemarle you are correct, not a drawdown if leaving for 5 years.

Albermarle

fiddlerman said:

Thanks for all comments. Albemarle you are correct, not a drawdown if leaving for 5 years.

You may also consider transferring two of your pensions into the third one . As long as it is a relatively modern pension , offering drawdown ( older ones usually do not ), it could be as good an option as moving all three to a new provider, if the charges are reasonably competitive.

gm0

If an employer still exists and a scheme is active then sometimes trustees update the employer trust pension scheme with a collectively negotiated drawdown product being added to modernise the old scheme.  This new feature will likely work like a transfer as it is legally and operationally the practical way to do the bolt on.

This will be good/bad/indifferent on costs and features and it will be invisible until actually announced for implementation. 
I waited for and used mine as the platform fee was low 0.06%, fund choice was adequate, and it retained insured funds (100% protection) status.  And I had another reason to have to deal with that company so it remained "on my list".  Others would have scoffed at the still limited fund range and fairly primitive digital facilities and moved along. 

That sort of modernisation deal with an active large employer happens around the reletting of the scheme admin contract by trustees every 3 or 5 years or whatever that cycle is. And it likely won't happen for a defunct employer/inactive scheme with no present day employees that is running off for existing members - expecting people to mostly transfer out vs stay and buy an annuity.  Sadly trustees won't (can't and shouldn't) tell you about it until it is definitive.  And the terms and conditions communications will arrive at or after migration - at launch in other words.

So this can be a potential argument if costs are a wash - not to hurry and do it years before you need to for drawdown. You foreclose on options that "may" exist at the time. 

Clearly you can save or make a little money during the wait - by moving or not moving based on cost structure of current investments and wrapper vs retail SIPPs.  The monevator page or the forum snowman spreadsheet  could give a good indication of the cost compare vs your current costs for similar investments

fiddlerman

Thanks again for comments....there are 3 pots 68/20/2k respectively - all from previous employers. I had considered the idea of moving smaller into larger and sitting on it.....however the largest pot is in a lifestyle fund (i have flagged it to be taken end this year)...I was alarmed to read recently that in times of rising interest rates, lifestyle funds which include bonds can fall - this appears to be the case.....the pot was 78k last December! I guess there are other forces - pandemic/Ukraine making things volatile...I am querying with provider but have not found them that informative.....quoting the 'rise and fall' etc etc..

dunstonh

.I am querying with provider but have not found them that informative.....quoting the 'rise and fall' etc etc..

The provider cannot breach regulatory permissions, and your questions to them are outside of their remit.   It requires advice permissions to go into things like that.  So, the provider is not being unhelpful. They just cannot do it.  And to be honest, do you expect an unqualified call centre worker on a rolling three-month contract to be able to answer questions like that?

the pot was 78k last December! I guess there are other forces - pandemic/Ukraine making things volatile.

Equities are beginning to overtake gilts on the way down.   A gilts crash is 5%+.  An equities crash is 20%+    

Lifestyle risk reduction is not about making the most money but preventing a major drop just before you draw all the money out.  If you don't plan a 100% withdrawal or an annuity purchase then risk reduction doesn't need to occur or be a lot less depending on your drawdown strategy.

Pablo7474

dunstonh said:

Has anyone compared advice from more than one adviser ?

An IFA should easily beat a restricted adviser.  

Why do people think this? Why is an IFA better?

dunstonh

Pablo7474 said:

dunstonh said:

Has anyone compared advice from more than one adviser ?

An IFA should easily beat a restricted adviser.  

Why do people think this? Why is an IFA better?

Restricted adviser means there are restrictions on what they can offer.  IFAs are not allowed to restrict.   

The most common restrictions are:
1 - not able to use ETFs, ITs, EIS, VCTs etc
2 - limited to a panel or even just their own brand funds and products.
3 - Restrictions on product functionality or advice in certain product areas/functions