Managed Pension charges and IFA charges

bjorn_toby_wilde

Like most services you either learn to do it yourself or pay the going rate for it. Also, like most services, there are good value providers and poor value.

Ibrahim5 just paints all IFAs the same and offers no sensible alternatives. There’s nothing constructive in their posts. Just looking to wind people up, which seems to have worked.

RogerPensionGuy

On a slight link to this thread. 

I spoke to a large UK insurance company that I have a SIPP & GIA on their platform.

Just asking if that can provide me an annuity and purchase life annuity quote from the whole of market. 

They said no problems, but they will charge me 5K as they need to ask me lots of questions as per the rules, even though I'm 100% only going to get one or both products previously mentioned. 

Apparently the 5K charge was for a product costing 50K or 300K or whatever, so I said if I get a 50K product, that's a 10% charge and that seems high. 

Apart from the 5K I guess they get a nice % from the product supplier. 

I understand rules and requlations can often be great stuff, but these charges can be pretty blunt. 

Bostonerimus1

RogerPensionGuy said:

On a slight link to this thread. 

I spoke to a large UK insurance company that I have a SIPP & GIA on their platform.

Just asking if that can provide me an annuity and purchase life annuity quote from the whole of market. 

They said no problems, but they will charge me 5K as they need to ask me lots of questions as per the rules, even though I'm 100% only going to get one or both products previously mentioned. 

Apparently the 5K charge was for a product costing 50K or 300K or whatever, so I said if I get a 50K product, that's a 10% charge and that seems high. 

Apart from the 5K I guess they get a nice % from the product supplier. 

I understand rules and requlations can often be great stuff, but these charges can be pretty blunt. 

In the US I have an 35 year old teachers retirement account that I can turn into a lifetime annuity anytime with no fees.  I'm in my early 60s and the payout rate I was recently quoted was 9.5%. I could also call an insurance company like MetLife etc and get a quote without an upfront fee, although I'm sure I'd pay on the back end. I look at the charges associated with many UK financial products and think they are pretty ridiculous. 

dunstonh

I spoke to a large UK insurance company that I have a SIPP & GIA on their platform.
Just asking if that can provide me an annuity and purchase life annuity quote from the whole of market. 
They said no problems, but they will charge me 5K as they need to ask me lots of questions as per the rules, even though I'm 100% only going to get one or both products previously mentioned. 

If you ask an in-house salesforce you expect to pay in-house salesforce rates.

Apart from the 5K I guess they get a nice % from the product supplier. 

No. Commission was banned from 1st Jan 2013.   It was replaced with fee.    Only non-advised sales can still take commission.

I understand rules and requlations can often be great stuff, but these charges can be pretty blunt. 

If the fee is a fixed £5k then it tells you a lot about their target market.  i.e. don't want values of £50,000k but more interested in values of £250k+

Hal17

Sealy266 said:

We are very low maintenance customers!  We are retired - been for the last 3 yrs - no other needs and all our pot is with RL GP and if we need a one off payment or increase to the yearly drawdown amount we contact RL ourselves as it’s quicker and easier than using the IFA!  I was a maths teacher so calculate the the potential affect on the pot when increasing drawdown and income off payments and check the fund growth/loss monthly to ensure we are on track still and we are in a low-moderate risk 

I'm with Royal London and have a similar size pot in a GP fund. My annual charges taking into account the profit share is 0.27%. I don't have a IFA and deal direct with Royal London. Nice and easy and straightforward. Have you downloaded the Royal London App, that is useful.

Qyburn

RogerPensionGuy said:

On a slight link to this thread. 

I spoke to a large UK insurance company that I have a SIPP & GIA on their platform.

Just asking if that can provide me an annuity and purchase life annuity quote from the whole of market. 

They said no problems, but they will charge me 5K as they need to ask me lots of questions as per the rules, even though I'm 100% only going to get one or both products previously mentioned. 

Why not look at HL or someone to see what sort of deal you could get without an IFA?  IFAs on here are always saying how they get much better annuity rates than you could get direct, but would it be enough to pay back that £5k?

Nebulous2

My plumber is extremely good. He put in my boiler and services it every year to maintain the 12 year warranty. 

Mostly retired, with time on my hands, we've been DIY-ing a fair bit, we have just installed a new shower room. 

Our plumber uses copper pipes, brazes all the joints, and his work is very neat. We use plastic pipes, pushfit connectors and it can look a bit like spaghetti junction, though it is out of sight, unless you look very hard. 

The plumber would fit a new bathroom in 3-4 days. It took us 3 months. I've had to buy a few new tools, and consumables such as jigsaw blades and drill bits in addition to the cost of materials.  

We can use all the analogies we like, but many (most?) people would never pick their own investments, just as most people would never plumb their own bathroom. 

With a modest sum invested, an even more modest sum in cash, most of my needs met by a DB pension, and all of them met by secure income once the state pension kicks in, I feel very little need for an IFA. Yet I've a feeling that I'm getting the plastic jumble instead of the neat copper pipes. 

thriftytracey

I have a RL drawdown that I took out via an IFA when I retired.  After 18 months I dispensed with the IFA's services, (and saved £1500 a year).  We didn't have any lump sums to invest or inheritance or tax issues.  I monitor the pension online and I recently took a withdrawal from my tax free lump sum directly through RL and it took 3 days to reach my bank account.  I have also added pension contribution via RL and they were very efficient.

The IFA did offer to set up POA for several hundred pounds but I have done it myself for £82 each.

Albermarle

bjorn_toby_wilde said:

Like most services you either learn to do it yourself or pay the going rate for it. Also, like most services, there are good value providers and poor value.

Ibrahim5 just paints all IFAs the same and offers no sensible alternatives. There’s nothing constructive in their posts. Just looking to wind people up, which seems to have worked.

Or only half learn it and/or take advice from a mate down the pub, and think you understand when you do not.
We see quite a few of those on the forum.....

bjorn_toby_wilde

Albermarle said:

bjorn_toby_wilde said:

Like most services you either learn to do it yourself or pay the going rate for it. Also, like most services, there are good value providers and poor value.

Ibrahim5 just paints all IFAs the same and offers no sensible alternatives. There’s nothing constructive in their posts. Just looking to wind people up, which seems to have worked.

Or only half learn it and/or take advice from a mate down the pub, and think you understand when you do not.
We see quite a few of those on the forum.....

Another example where plumbing is a good analogy