Managed Pension charges and IFA charges

Sealy266

We pay Royal London for a managed portfolio but we are also paying an IFA to manage it as well!!  The IFA is getting nearly £5k a year for literally nothing as far as we can see as we deal direct with Royal London as if we went via the IFA for any draw down increases or 1 off amounts it takes 2 weeks longer!!  The funds have not been moved by the IFA.  Am I missing something that we need her for or should I part company with her and save the £5k a year?

Albermarle

To set up a RL pension, you would have needed an IFA. Presumably at the time you paid a fee and then agreed to ongoing charges ( which is the £5K).
It sounds like you are not really getting much for your money in this case. Do you have regular reviews? Do you have any other investments they manage.
What actual % are they charging on what value.
For example is it 1% on £500K or 0.5% on £1M? Or something else?

Ibrahim5

The IFA will be exhausted in the background, continually monitoring the performance of your investments, continually assessing their suitability and checking the global financial situation. If a change was needed they would be straight on the phone to you. All this work doesn't come cheap.

Ibrahim5

Seriously just get rid of them and keep the £5k yourself.

dunstonh

We pay Royal London for a managed portfolio but we are also paying an IFA to manage it as well!!  

RL manage the individual funds.   The IFA decides which funds you invest in.

The IFA is getting nearly £5k a year for literally nothing as far as we can see as we deal direct with Royal London as if we went via the IFA for any draw down increases or 1 off amounts it takes 2 weeks longer!!

RL is a bit of an anomaly because they still use old-fashioned methods to do things.     I tend to use them for transactional clients (i.e. relatively small values where people are going to DIY beyond setting up) because they are so easy for consumers to deal directly.  Because of this they are not the fastest (the fastest can have the money in your account in 20 minutes after the IFA has keyed the transaction) but they are good enough at a few weeks.   I wouldn't use them for ongoing servicing clients.   However, some advisers will.

The funds have not been moved by the IFA.  Am I missing something that we need her for or should I part company with her and save the £5k a year?

What you get from adviser firms varies.    If you do not perceive value, then you ask the adviser to end ongoing servicing.
If the pension pre-dates 2013, then you are on an older version of the contract that is commission based rather than fee based.    Rules changed that year along with the things an adviser is required to do but only on plans set up after 1st Jan 2013.   If its a commission based plan, then its not treated as a fee for work the adviser carries out unless the adviser voluntarily decides to do it or there is an event that brings it into the modern world and requirements.

 The funds have not been moved by the IFA.

The RL Governed portfolios would have seen pretty frequent changes.  So, if you are not seeing changes then it suggests you are not in a Governed Portfolio or an IFA portfolio.  

Sealy266

It’s a governed portfolio with the RL and it’s about 500k

Albermarle

Sealy266 said:

It’s a governed portfolio with the RL and it’s about 500k

So apart from the question of whether you need the IFA or not, they are charging 1% , which is high for a fund of that size.
Normally should be 0.75% or even 0.5%.

Sealy266

Yes we pay the IFA 1% and RL 0.4% 

wjr4

Sealy266 said:

Yes we pay the IFA 1% and RL 0.4% 

And what do they do for it? Do you receive a full financial plan?

AlanP_2

Sealy266 said:

Yes we pay the IFA 1% and RL 0.4% 

I would think you are paying RL a net 0.25% as there is a "profit share" scheme that rebates 0.15% of charges paid.

I have a Governed Portfolio with them that was originally setup by an IFA that they are no longer linked with. RL make adjustments across the range of funds / assets that are in the portfolio on a monthly basis. Given that, once the GP has been chosen I'm not sure what the IFA could be adding (apart form more encompassing tax / inheritance advice etc.)

Sealy266

AlanP_2 said:

Sealy266 said:

Yes we pay the IFA 1% and RL 0.4% 

I would think you are paying RL a net 0.25% as there is a "profit share" scheme that rebates 0.15% of charges paid.

I have a Governed Portfolio with them that was originally setup by an IFA that they are no longer linked with. RL make adjustments across the range of funds / assets that are in the portfolio on a monthly basis. Given that, once the GP has been chosen I'm not sure what the IFA could be adding (apart form more encompassing tax / inheritance advice etc.)

Thank you this is how ours was set up - we don’t need any tax advice/inheritance so I honestly think we need to part ways with them as we are not using them!