Moving pension from Standard Life to Vanguard

archiee_2

I have a personal pension with Standard Life, but I've become aware of the relatively high charges made against the total pension pot, over 1% even when invested in a passive Vanguard index fund. By moving the money to the same fund invested directly with Vanguard, the ongoing fee is just 0.2%, i.e. a fifth of the SL charge, for the same fund. This mounts up over the decades. However, I've hit a difficulty with the transfer, in that Vanguard terms say that I have to have the transfer signed off my a financial adviser, confirming that I've made an informed decision. The first couple of advisors say they'll give me advice, sure ... but it'll cost me 2% of the fund value, which negates the object of the move in the first place. Any advice? Are there financial advisers who'll talk with me for an hour's fee to sign off the transfer? Thanks.

Marcon

archiee_2 said:

I have a personal pension with Standard Life, but I've become aware of the relatively high charges made against the total pension pot, over 1% even when invested in a passive Vanguard index fund. By moving the money to the same fund invested directly with Vanguard, the ongoing fee is just 0.2%, i.e. a fifth of the SL charge, for the same fund. This mounts up over the decades. However, I've hit a difficulty with the transfer, in that Vanguard terms say that I have to have the transfer signed off my a financial adviser, confirming that I've made an informed decision. The first couple of advisors say they'll give me advice, sure ... but it'll cost me 2% of the fund value, which negates the object of the move in the first place. Any advice? Are there financial advisers who'll talk with me for an hour's fee to sign off the transfer? Thanks.

Does your pension with Standard Life have 'safeguarded benefits' (some sort of promise such as a guaranteed annuity rate) and is the value at least £30K?

If not, it's a defined contribution scheme, so you shouldn't need advice. Have another look at Vanguard's guide to transfers: https://www.vanguardinvestor.co.uk/content/dam/intl/uk-retail-direct/documents/SIPP-transfers-factsheet.pdf

archiee_2

Marcon said:

archiee_2 said:

I have a personal pension with Standard Life, but I've become aware of the relatively high charges made against the total pension pot, over 1% even when invested in a passive Vanguard index fund. By moving the money to the same fund invested directly with Vanguard, the ongoing fee is just 0.2%, i.e. a fifth of the SL charge, for the same fund. This mounts up over the decades. However, I've hit a difficulty with the transfer, in that Vanguard terms say that I have to have the transfer signed off my a financial adviser, confirming that I've made an informed decision. The first couple of advisors say they'll give me advice, sure ... but it'll cost me 2% of the fund value, which negates the object of the move in the first place. Any advice? Are there financial advisers who'll talk with me for an hour's fee to sign off the transfer? Thanks.

Does your pension with Standard Life have 'safeguarded benefits' (some sort of promise such as a guaranteed annuity rate) and is the value at least £30K?

Thanks Marcon, it's a defined contribution scheme worth substantially more than £30k. I previously read the factsheet that you've kindly linked, and I obviously mis-read the section *If the pension you want to transfer is worth more than £30,000, you’ll also need to have the transfer signed off by a qualified financial adviser before your pension scheme will release the money* I believed this applied to all pensions, but re-reading, I see it's just applicable to Final Salary schemes. 

Albermarle

archiee_2 said:

I have a personal pension with Standard Life, but I've become aware of the relatively high charges made against the total pension pot, over 1% even when invested in a passive Vanguard index fund. By moving the money to the same fund invested directly with Vanguard, the ongoing fee is just 0.2%, i.e. a fifth of the SL charge, for the same fund. This mounts up over the decades. However, I've hit a difficulty with the transfer, in that Vanguard terms say that I have to have the transfer signed off my a financial adviser, confirming that I've made an informed decision. The first couple of advisors say they'll give me advice, sure ... but it'll cost me 2% of the fund value, which negates the object of the move in the first place. Any advice? Are there financial advisers who'll talk with me for an hour's fee to sign off the transfer? Thanks.

Vanguard have a platform fee of 0.15% as well, so the total cost will be 0.35%.

The 1% standard fee from SL is almost certainly subject to discounts.
From memory they have a standard discount something like 0.3% for funds over £100K
However many SL pensions are ex workplace pensions, and often have a bigger discount. Mine is 0.65% but I have heard higher. If you have a large fund they will negotiate as well. 
The best way to be sure about what your charges really are is to call them. Or if you have the SL app on your phone, there is a charges tab that is very clear. On the website it is less than clear.

dunstonh

but I've become aware of the relatively high charges made against the total pension pot, over 1% even when invested in a passive Vanguard index fund.

Is that from the fund factsheets or the actual charges?    Std Life's factsheets assume 1% but that is before scheme specific discounts.  e.g. you can have an SL scheme that charges 0.3% but the factsheets will still say 1%.

 However, I've hit a difficulty with the transfer, in that Vanguard terms say that I have to have the transfer signed off my a financial adviser, confirming that I've made an informed decision. The first couple of advisors say they'll give me advice, sure ... but it'll cost me 2% of the fund value, which negates the object of the move in the first place. Any advice?

Financial advice is required where the fund value is over £30k and you have a safeguarded benefit.   Safeguarded benefits can be highly valuable most of the time and its a bit of consumer protection to help avoid consumers making a bad decision when they don't know what they are doing.   It often frustrates knowledgeable investors/individuals but its not aimed at them.    So, what safeguarded benefit do you have and why don't you think it is valuable?

 Are there financial advisers who'll talk with me for an hour's fee to sign off the transfer?

Not a chance in hell.   I think you misunderstood the requirement.    It's not just a chat.  Its a full advice requirement with a written report.    Unless it is a GAR, it will require a specialist adviser with pension transfer specialist permissions.   It also needs extra regulatory permissions.     Only around 1 in 10 advisers hold it.      Plus, its one fo the highest risk transactions an adviser can carry out.  It's a transaction that PI insurers ask about on their proposal forms. Not just numbers but specific case details. 

Its time consuming, detailed and most advisers don't really want to do it. 

Rich1976

The OP could well be correct with the 1%. On my workplace scheme with SL only the default fund is discounted to 0.64%.
all the other funds including trackers are 1% or more.
i have checked with SL on more than once occasion and they confirm all of the other funds are not eligible for discounts.

bizarrely SL are now offering a personal pension where they will discount 50% over a certain fund size. 50k I think. And the default fund would be 0.50%. Unfortunately people are stuck on whatever scheme they are  in and the new reduced charges are not being applied across the board 

JohnWinder

Apparently higher fees, and no one here can be sure what they are. Is it any wonder Vanguard has taken business from the dinosaurs?
https://spearswms.com/wealth/vanguard-investment-rise-uk/ 
'To make just one comparison, the all-in average ‘ongoing charges figure’ for a ready-made Vanguard portfolio – including the funds and platform – is 0.37 per cent. For a typical Hargreaves Lansdown balanced portfolio it is 1.37 per cent.' From that article.

dunstonh

Apparently higher fees, and no one here can be sure what they are. Is it any wonder Vanguard has taken business from the dinosaurs?

Just because people on the internet cannot be sure what the terms are on someone's policy does not make Vanguard better.   
SL primarily focus on the workplace market.   Vanguard do not operate in the workplace market.   So, that makes Vanguard worse purely on the basis they don't have a product for it..     

The workplace market benefits from economies of scale.   So, larger schemes can get far lower costs than Vanguard can offer but smaller schemes may not.    It is an absolute doddle to find out what the actual charges are.   However, we know from previous posts, that some people read the factsheets that use the pre-discount price and mistakenly think that is what they are paying.    It makes sense to check and be sure.

'To make just one comparison, the all-in average ‘ongoing charges figure’ for a ready-made Vanguard portfolio – including the funds and platform – is 0.37 per cent.

So, not very good compared to many SL pensions that are 0.10% to 0.30% all in.  But better against those that cost more than 0.37%