Transfer cash out of workplace pension to SJP?

kinger101

Most people here wouldn't even let the barge pole of their worst enemy come within touching distance of SJP.

Aylesbury_Duck

The only thing I can add to the good advice above is not to rush into a decision.  Take time to learn a lot more from here and elsewhere and then make a decision. In the meantime, your current arrangement with Aviva is fine, there's no need to do anything hasty.

thedreamersclub

El_Torro said:

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.

So the fund I'm in has the following asset allocation (~85% equities):



I'd be fairly happy keeping most/all of my pot with Aviva for now, and perhaps moving segments into some different funds as I learn more about investing (and my own attitude to risk). 

If I wanted advice from an IFA on an annual basis as to how to apportion my pension between different funds, would this always be on the basis of a % of the amount they were advising on (regardless of whether I moved any of it, and whether I actioned this myself)? Or can IFAs work on a fixed advice fee basis?

El_Torro

Your Aviva fund is already heavy in equities, you're right. It looks about right for your age, assuming you're happy with the volatility and appreciate that when a crash does come this fund will be hit pretty hard (though should recover well too). 

Yes, an IFA can give you one off advice. That won't include monitoring the funds you are in over time of course but if you are happy with this that is a service that many provide. 

LHW99

And as Aviva is your workplace pension, would you be able to transfer away part of it without opting out and maybe missing out on some Company contributions?

scoobyjones1

I would avoid that company as others have said already...the fees are also high for nothing more than you have already.
At your age I would open a SIPP and move some or all of your pension into that when you are allowed to. You can do research and ask questions on boards such as this and you would be able to invest in similar ways by yourself. Most SIPP providers would allow you to invest in a simple S&P 500 fund, QQQ or similar, or a manged fund if you wanted. When you have learnt more about how it all goes you could pick and choose your own stocks to invest in perhaps. With your own SIPP you are not tied to any specific fund or financial adviser. You can use one at first if you want to but once it's up and running well, personally I don't feel the need to pay an IFA. I have had a few bad ones in the past and have done much better on my own, albeit after a lot of time and experience....a few mistakes along the way. Time is on your side, so there is no panic...

The_Boss

I moved my Aviva workplace pension balance to an AJ Bell SIPP a few months ago - I was on the same plan as you with Aviva but find AJ Bell have a far wider range of funds to invest in and find it easier to track progress with them. My monthly contributions are still paid into my Aviva account but I have changed how they are invested away from the default My Future Focus into four different funds. Every time the pot hits £10k I'll transfer that to AJ Bell. Going well so far, with my investment up by 5% overall in a couple of months (higher than my Aviva pot has increased by in the same period) and the cost of the pension is only slightly higher. Maybe this sort of thing could be an option for you

kinger101

The_Boss said:

I moved my Aviva workplace pension balance to an AJ Bell SIPP a few months ago - I was on the same plan as you with Aviva but find AJ Bell have a far wider range of funds to invest in and find it easier to track progress with them. My monthly contributions are still paid into my Aviva account but I have changed how they are invested away from the default My Future Focus into four different funds. Every time the pot hits £10k I'll transfer that to AJ Bell. Going well so far, with my investment up by 5% overall in a couple of months (higher than my Aviva pot has increased by in the same period) and the cost of the pension is only slightly higher. Maybe this sort of thing could be an option for you

The pension fund is just the wrapper.  The performance of the investments is largely down to the funds they're invested in.  5% over the last two months might be regarded as poor if you're 100% equities.  VWRP is up 8.8% in the period.  There's been something of a bull run recently.

The key is picking the right level of risk for you.

Back to OP - The fund they're is 85% equities, which is probably fine for someone 10+ years from retirement.

The SJP person who's picked a fund that has historically performed better than the one you have with Aviva has essentially done the equivalent of picking up yesterday's racing results any working out the more profitable bet.  Unless their ridiculously high fees include access to a time machine, their advice is about as much use a a pogo-stick in quicksand.  

Albermarle

El_Torro said:

Your Aviva fund is already heavy in equities, you're right. It looks about right for your age, assuming you're happy with the volatility and appreciate that when a crash does come this fund will be hit pretty hard (though should recover well too). 

Yes, an IFA can give you one off advice. That won't include monitoring the funds you are in over time of course but if you are happy with this that is a service that many provide. 

Although AIUI, some IFA's are not that happy taking on transactional clients and like the steady income that ongoing % charging brings ( not surprisingly) .

gm0

The discussion has already somewhat revealed the three cups one pea - leger de main that advice salesforce uses routinely.  Particularly those with a high cost product to shift.  Behaviours vary with integrity of the individual sales player - so watch out. 

The pea cup game works like this.

- Risk is not truly held constant in presented comparisons of the past.  Backtested returns in a suitable selected period are shown for risk on/off to suit the client risk context and period  But the existing vs new compare - won't actually be risk equivalent between the two.  Where possible the successful in the past selected higher risk portfolio will - surprise surprise have done better than the lower risk one in that period.  Exposure to future drawdowns may well be signficantly higher - but that's not the point.  Closing is.

Worse still - "assumed" costs may be used in the presented compare i.e. "typical retail costs" are assumed. 

Not actuals.  Not what you already actually pay. This is to slug the comparator lines and make the favoured line seem nearer the top.  Arms are waved - ah data availablility. Limitations of our database.  Which mysteriously exclude  things which would make our products look bad.  I had an argument with a wealth manager - where they would not plot against pure index TR no drag. To demonstrate medium term superior performance, justifying their higher fees.  And they had not used my actual costs.   Basically they had slugged the compare line by the thick end of 0.45% extra drag compounded.  Passive UK indexer at 0.5% assumed - having a laugh. 0.1% widely available.  And mine was even lower - under half that.. 

Only by reading the very small print (again deliberate) would you spot it.  
Looking at the graph in the speedy happy place discussion. Their stuff looked great.  But they blew it my myopia is a small print super power.

SJP have implemented Polaris for the mass affluent i.e. paupers. Rather than use their prior customised portfolio product which was previously used for everyone but more costly to run.  And they have dumped exit fees for new customers. Cue the worlds' tiniest celebration. 

But their advice is still very expensive. And Polaris is nothing special - neither truly awful in terms of what's in it. Just meh and you can definitely do much the same underlying assets cheaper.  With or without advice.

Their old pension product before consolidating was a masterpiece of layering and obfuscation with "actual funds" (and what is in them) a couple of layers buried and constantly changing - making tracking at anything below top level - tricky.  Almost as though it was deliberate

If you want advice you need to shop for it.  Half the price advice will be available from "not wealth managers".  In the end you pay what you choose to someone you decide to trust.  After as much searching and mucking about as suits you.