Pensions

greevescat

I have 2-4 Pensions with different providers and coming upto retirement age. My FA is saying they should all go into 1 pot managed under Fundment. Does anyone have any experience with this and what the typical annual charges are?

gm0

You can consolidate pensions for free - with a little admin yourself.  No cost.  No ongoing cost above platform and fund fees 
It's a reasonable amount of work.  Depends on time and interest and the value you place on freeing up that time.

You can pay a pension benchmark firm a fixed fee of a few hundred pounds to do the admin and recommend a place to go and move it there.  Various players on a similar sales model to PensionBee - consolidators. 
But they use intermediary platforms like Aegon instead of the house platform with PensionBee.  Some with ongoing. Some without. To suit you.

Or you can pay a genuine IFA (Independent) a capped % of pot fee to do it and set you up (regulated advice) from a wide range of product in the market.

Or you can pay an FA tied to a single product a higher fee to be placed in their likely more expensive product which (spoiler) won't be better or magic in any way.  It will perform randomly better or worse but be carrying more drag in costs.  You get paid last. Probably after being invested in higher risk funds with higher drag.  Slurp Slurp Slurp.

Benchmarks for independents:

Initial fee can be 0 if they want you badly.   Or 1-2% without or with a cap.  It's a negotiation.  They need to be paid somewhere - from large pot ongoing fees.  Or upfront. Or a mix.

Ongoing adviser fee is often 0.5% plus or minus (0.25% - 0.75%.  Less for bigger pots.  More for smaller pots to achieve a minimum fee per case handling. 

FAs and wealth managers the sky is the limit - what they can get away with.

All that extra cost to end up in similar investments of equities and bonds at the end. 

To rub salt in the wounds.  Some FAs have exit charges (paying annual ongoing fees for a run off period on new investments i.e. you transfer out net some more ongoing fees).   Read all contracts extremely carefully to the end.

What you are paying for is hand holding and not needing to learn about it to do it.

If you want it - buy it - but go and find a market prices independent and skip the FA universe entirely.

No idea about your FA or this provider.

Do try not to pay more than 0.5% ongoing and a fairly low capped 1% on the way in - thereafter plus platform and fund fees.
Platforms are 0.2% to 0.4% pa. Some capped and less depending what is held.
Funds are 0.1% for passive and maybe 0.5% for active or a bit more blended..

Expect a shell game with obfuscation of costs and what is a total and what excludes different things.

Very common is for an FA to talk about "the costs" with flowery language i.e. excluding the platform and fund management costs which are extra but seeking to give you the impression that the numbers are all in - yet in the small print - not so. 
With a tied house product they are taking a drink for the advice.  And again via the product being more expensive than needed.

Another everyday con is the adviser that uses a DFM to offload part of their work - which is charged to you separately and still banks the full 0.5% pa.

Good luck

Albermarle

greevescat said:

I have 2-4 Pensions with different providers and coming upto retirement age. My FA is saying they should all go into 1 pot managed under Fundment. Does anyone have any experience with this and what the typical annual charges are?

From a practical/admin  point of view, it can be a good idea, to consolidate pension pots to a smaller number, if you intend to take income via drawdown. Some older pensions can be inflexible with limited on line access for example.
If you were a DIY investor ( without an advisor) you would look at maybe combining into one ( or two ) of the existing pensions. Or alternatively opening a new pension and transferring some or all of the old pensions in to it.
An FA will want you of course to move to their in house platform. An IFA will probably want to move you to one of their preferred platforms that they use for other clients, and are familiar with. However with an IFA you could express your own preference as they are not tied to any pension provider.

What is more  important, regardless of exactly what happens with the provider/platforms, is that your money is invested within those pensions in investments that suit you/your situation/your risk profile/your objectives and with as low charges as practical .

For example an expensive FA promoted product could cost you .

Initial fee 3%

Ongoing advisor fee 0.5%
DFM fee 0.4%
Platform fee - 0.4%
Investment charges - 0.8%
Total ongoing fees - 2.1%

A very low cost DIY investor maybe could pay

Platform fee 0.05%
Investment charges 0.1% 
Total fees 0.15%

In the middle a more typical well informed DIY investor would be paying between 0.3% and 0.6% , with the less savvy paying up to 1.5%

An IFA package would typically be costing between 1.2% and 1.5% ( + the initial fee) but of course you get the benefit of professional advice