Transfer cash out of workplace pension to SJP?

thedreamersclub

I have been discussing with an adviser from Clearwater Wealth Management about setting up a private pension with St James Place. The adviser has proposed that I move half of my segments out of my Aviva workplace pension into a private pension with SJP.

The main selling point seems to be the ongoing advice, because it seems hard on paper to see why I'm going to do better with the SJP pension, once the comparative performance and disparity in fees is taken into account. 

The fund I am currently in with Aviva is the My Future Focus Long Term Growth Pn S6 GBP Acc. Performance for the last year is below. Annual fees are 0.4% total.

The fund the FA from SJP is suggesting I transfer into is the SJPI Polaris 3 Acc. Performance for the last year is below. Annual fees are 1.67% total.



I am not particularly well informed about pensions (something I am trying to change, which is why having a private pension I can be more involved in is attractive to me). But based on the above, it just doesn't seem to be worthwhile.

The fund performance of the proposed SJP option was lower than my current Aviva fund last year, and when the significantly higher fees of the SJP fund are added in, I question what I'd actually be getting for my money.

My feeling is that I'd be better of speaking to an IFA (or at least doing a sanity check with an IFA before going any further with SJP).  

Thoughts (please be brutally honest)?

strawb_shortcake

Based on what I've read on here SJP should probably be avoided like the plague

DRS1

No-one on here is going to suggest you proceed with SJP.

Albermarle

Stay with Aviva.

tacpot12

SJP would have to secure you a return of 1.5% more than your Aviva pension to make it work the risk of moving it, which they will struggle to do because it's already invested in a fairly adventurous fund (which is appropriate if you are more that 7-10 years aways from retiring.)

SJP have a reputation for being expensive. 

I think a conversation with a truly independent financial adviser could be worthwhile, but if you have just the one pension, and you are away off retirement, I'm not sure that is necessary yet.  

MallyGirl

A quick search on here of the initials SJP would give you a good idea of how they are viewed on this board - in summary it's not in high esteem! If you must make changes then you should definitely be thinking about an IFA and not an FA/wealth manager. Can you not be more involved in your workplace pension? You are likely in the default fund but there may well be others to choose from.

MeteredOut

Replace the words "advisor" with "salesperson" in your post, and re-read it.

Search for both SJP and the Polaris fund on these boards, and then take a step back. Stay where you are and follow this board and the Savings and Investments board for a few weeks - you'll learn loads. And then, if you still think you need advice, find an IFA recommended by someone you know.

Stubod

..I have a bargepole you can borrow.....

thedreamersclub

Thanks for the input so far - really helpful. 

I am in a default pension with Aviva, and it is ranked as relatively high risk, but I'm happy with that as I'm only 39, and have plenty of time for accumulation.

MallyGirl

thedreamersclub said:

Thanks for the input so far - really helpful. 

I am in a default pension with Aviva, and it is ranked as relatively high risk, but I'm happy with that as I'm only 39, and have plenty of time for accumulation.

In which case I'd suggest that you are in a good place and you should stay there. Take this as a prompt to do some reading so that you can defend yourself from something like this in the future by having a good understanding 

El_Torro

If you are in the default fund then you are probably (not definitely) in a fund that is 60% equities and 40% bonds, more or less. Considering your age if you move to a fund that is more like 80% equities and 20% bonds this should do better in the long run, though with more ups and downs. It's worth looking at the funds you have available to you with Aviva to ascertain whether the fund you are currently in is the right one. 

One of the problems with SJP is that all their funds are managed, they don't have any trackers. This partly explains the high fees. The problem with managed funds is that they inherently come with higher fees, which makes beating trackers a difficult job. The majority of managed funds do not outperform trackers, and from what I have seen SJP are no exception. 

If you want to go with an IFA rather than manage your investments yourself they should be able to give you a total annual cost of 1.00% or below.