Management fees……can I do better?

StevieD54

I have approx £54k invested in a personal pension pot managed by Nucleus. I have a mixed profile going on, the majority of the funds are ‘safe-ish’ in a 60/40 defensive profile and I’ve recently invested the max allowed for retired non-tax payers into a more volatile profile, just for a bit of speculation.

I’ve never been too bothered about management fees before now, but a friend mentioned recently how little he was paying in a self investment pension with Vantage and it’s made me think about my fees. In the past year, these have come to about 1.6% on that £54k pot.  So is this good, bad, or average I wonder?  The advantage of having a manager is the ongoing advice, meetings etc as and when required with my financial adviser, at no extra cost of course.

StevieD54

My bad, I am actually a tax payer, what I meant to say is that extra investment is the £2880 annual allowance, topped up to £3600 by the government.

Linton

StevieD54 said:

I have approx £54k invested in a personal pension pot managed by Nucleus. I have a mixed profile going on, the majority of the funds are ‘safe-ish’ in a 60/40 defensive profile and I’ve recently invested the max allowed for retired non-tax payers into a more volatile profile, just for a bit of speculation.

I’ve never been too bothered about management fees before now, but a friend mentioned recently how little he was paying in a self investment pension with Vantage and it’s made me think about my fees. In the past year, these have come to about 1.6% on that £54k pot.  So is this good, bad, or average I wonder?  The advantage of having a manager is the ongoing advice, meetings etc as and when required with my financial adviser, at no extra cost of course.

Management fees come under various headings eg advisor, platform, fund management.  Each one needs to be assessed separately.

Do you have a breakdown of how your 1.6% is made up?

Albermarle

£54K is at the low end for having a financial advisor, so probably you are paying a high % fee so the advisor can make the business worthwhile for them. 

StevieD54

Thanks both.

Linton:
my Asset charges were 0.3%, the Service charges 1.3%, Overall 1.6%

Albermarle:
the pot had a £75k value when I left work at 63 a few years ago and I transferred it from my employer’s Std Life scheme to Nucleus upon a friend’s recommendation, then took drawdown from it for 3 years, hence it’s current valuation. But your comment has definitely given me something to think about, e.g. whether I could manage it myself using a suitable platform. Any recommendations?

dunstonh

I have approx £54k invested in a personal pension pot managed by Nucleus.

Nucleus are a platform. They don't do any management.

. I have a mixed profile going on, the majority of the funds are ‘safe-ish’ in a 60/40 defensive profile 

Defensive would typically be around 20% equities.

In the past year, these have come to about 1.6% on that £54k pot.  So is this good, bad, or average I wonder?

It depends on what you are comparing on what assets you are using.   Your 1.6% probably includes transaction charges as that is a regulatory requirement to disclose but most investors ignore that.  So, you would probably need to strip that out of your 1.6%.  

 The advantage of having a manager is the ongoing advice, meetings etc as and when required with my financial adviser, at no extra cost of course.

<snip>
my Asset charges were 0.3%, the Service charges 1.3%, Overall 1.6%

The adviser IS an a cost.   Its not a freebie.  Charges are normally broken down as:
Platform x%
Adviser x%
DFM x% (if one used)
OCF x%
TC x%  (usually a smallish percentage)
IC x%  (normally nil)
total

If you strip the adviser out, then your costs will immediately be reduced, but then you will have to take over the work.