Drawdown - Tax Free To Taxable Miscalculation?

GSP

I’m still confused however when he says he will have to do a rebalance and sell units moving from pre to post retirement fund? 

zagfles

GSP said:

I’m still confused however when he says he will have to do a rebalance and sell units moving from pre to post retirement fund? 

You need to talk to your IFA, most of us here use platforms aimed at investors who don't have an IFA, and I don't think any of those platforms would require selling/rebuying units which are simply being moved to drawdown.

zagfles

dunstonh said:

GSP said:

zagfles said:

GSP said:

My IFA has said:

“ I would perform a rebalance so that other fund units sold are repurchased in the post retirement account”.

I haven’t gone back to him yet, but does that sound right?
He mentions ‘other fund units being sold and having to be repurchased’.
Suggestions were he could just move over without having to sell anything?
Thanks

Which platform is it? It doesn't sound right unless he's moving the drawdown fund to a different platform. If it's the same platform they should be capable of simply moving the units across without selling and rebuying, which might incur transaction fees and possibly cause a loss (or gain) by being out of the market for a short time.

When I partially crystallised I sold enough units to free up the tax free cash, and for the other 75% being moved into drawdown, I just selected the funds I wanted to move/partially move to the drawdown account and they were there the next day.

It’s all on Aviva.

Aviva platform operates on the uncrystallised funds and crystallised funds being in two different accounts.  i.e. AVxxxxxxx-001 and AVxxxxxx-002.  The investments in each can be controlled independently of each other.   So, is the strategy in the two accounts being handled in different ways?

As do HL, they have separate accounts for crystallised and uncrystallised, but definitely don't require you to sell and rebuy investments you're moving to the drawdown account. Do Aviva? Pretty poor if they do, is this typical for platforms IFAs use?

GSP

zagfles said:

GSP said:

I’m still confused however when he says he will have to do a rebalance and sell units moving from pre to post retirement fund? 

You need to talk to your IFA, most of us here use platforms aimed at investors who don't have an IFA, and I don't think any of those platforms would require selling/rebuying units which are simply being moved to drawdown.

I’m just about to beg him the question for the second time, a little rephrased.
When I see words ‘selling units’ particularly with what has gone on makes me wonder if things are okay.
Perhaps that’s just what happens, but my concerns aren’t being answered or at least satisfied yet. 

EdSwippet

zagfles said:
As do HL, they have separate accounts for crystallised and uncrystallised, but definitely don't require you to sell and rebuy investments you're moving to the drawdown account. Do Aviva? Pretty poor if they do, is this typical for platforms IFAs use?

FWIW, I have an Aviva pension, an ex-employer GPP. On crystallising, they paid 25% of my amount out as cash, and simply moved the remaining 75% (pro-rata) of fund holdings into a 'drawdown' area. I don't know what they did behind the scenes; only that from my perspective it was all seamless, easy, and relatively quick.

Just one data point, of course. I realise not all Aviva pensions are created equal.

dunstonh

Aviva platform just transfers the equivalent assets over to the crystallised segment. No buying and selling involved.

GSP

dunstonh said:

Aviva platform just transfers the equivalent assets over to the crystallised segment. No buying and selling involved.

This is c&p from his email dunstonh:
” I would perform a rebalance so that other fund units sold are repurchased in the post retirement account”.

What do you make of this? Does this set alarm bells off?
Thanks

Bimbly

I would have said it means something like this.

Say you have 60% of your funds in an Global Equity Tracker and 40% in a bond fund, but over time they have changed in valuation so you now have 65% equities and 35% funds. 

When you move funds over, the IFA will conduct a rebalance to return to the 60/40 split. So sell 5% equities and buy 5% bonds.

That's what I would understand as a rebalance.

Would that be right?

GSP

Bimbly said:

I would have said it means something like this.

Say you have 60% of your funds in an Global Equity Tracker and 40% in a bond fund, but over time they have changed in valuation so you now have 65% equities and 35% funds. 

When you move funds over, the IFA will conduct a rebalance to return to the 60/40 split. So sell 5% equities and buy 5% bonds.

That's what I would understand as a rebalance.

Would that be right?

From this description, sounds like you are:
Rebalancing is the process of realigning the weightings of a portfolio of assets. Rebalancing involves periodically buying or selling assets in a portfolio to maintain an original or desired level of asset allocation or risk. For example, say an original target asset allocation was 50% stocks and 50% bonds.

My query or concern is does the portfolio need rebalancing when it’s usually reviewed and rebalanced at my October review. With the description above, is it actually a good time to be buying and selling assets if assets could just move from uncrystallised to crystallised when a tax free transaction goes through?