Pension advisors - on-advice charges

bad_knees21

https://forums.moneysavingexpert.com/discussion/comment/82123108#Comment_82123108

This is incredibly helpful - thank you.

The ongoing service advice (for the 0.95% a year) consists of:
Annual statement of your holdings
24 hours access to your portfolio online
Access to our client team
Ongoing access to your advisor
Liaise with other professionals
Annual adisor discussion or review

I don't think this is entirely necessary right now - I just need to know where my pension is and how I can add noney to it from other pension pots?

bad_knees21

https://forums.moneysavingexpert.com/discussion/comment/82123099#Comment_82123099

A great question! I think I thought that it would be a good place to have them all in one place and get the best level of growth

gm0

Adding money to a DC pension pot from other pots. Is usually done by either

a) Closing it. Full transfer. All pensions DC must support this. And do. You "pull" by asking the receiving scheme to process a transfer in. Using any cashback offered with SIPP platform which they do from time to time. This further offsets fees

b) Partial transfer. Where supported. (Not ALL do - this is not a universal thing). A workplace pension is partially emptied by remaining a member and contributing ongoing. The money is pulled to the SIPP as before opening up more investing options. People do this periodic scraping for investing options typically. And to avoid leaving/rejoining delays and admins and losing employer contribution + hassle. My scheme didn't let you do this.

Fresh contributions via employment are often tied to a workplace trust or employer directed product nest etc.

Any others you make can go as you choose

The last three elements of your list - "the other financial advice on tax planning" is the bit with actual value where someone who does lots of cases. Can help you. The rest is the same as you get with DIY. 24 hour acess to app/web. call centre for things the app cannot do. There is nothing for free. Pension investing can be done sub 0.2% per year without advice. 0.7% (with a 0.5% fee for advice (portfolio large enough to hit the "interesting" bar for advice. You are getting charged more for the overhead of "each customer to service gets a share of overheads" are you worth it decision on advice price tiers. If you need advice - beyond forum guidance. Then it's worth it - for you. I have used an adviser. I don't have a problem with the fact it's a paid service provided on a per profit basis. The time you spend to avoid it (education and admin) has a value too. Both choices are perfectly defensible.

The problem comes from the cost compounding over many years as a drag on returns. Most advice offers nothing over a simple portfolio in terms of guarantee of "better" outcomes. It will not create an entirely mad portfolio - the FCA hold them to a standard that it be "suitable" for the declared (fact find admin) customer situation. Suitable is not better. A complex thing which adds back up to market return more or less. Isn't doing much beyond adding cost. If advised portfolios were consistently able to be better. Then it would feature in the contracted offer. It doesn't. It isn't. Draw your own conclusions

dunstonh

Thank you for this! The company who have done the analysis is an Independent financial advisor, so they are suggesting using Aegon for the pension

Aegon? Interesting choice.

Platforms are like supermarkets. Everyone has their preferences. Not my cup of tea but thats my preference.

The only information I have is that this is a 0.27% charge that Aegon charge (the pension that they have advised me to consolidate my old pensions into and transfer some of my workplace pension into)

So, you are missing the charges for the investments.

BTW, Aegon at 0.27% is a choice you may wish to question them on when you get lower cost platforms with better software in the 0.1x% range.

the total value of assets is just under £30,000

ongoing servicing seems to be a bit unnecesary unless you are going to be paying a lot into it over the years.

The ongoing service advice (for the 0.95% a year) consists of:
Annual statement of your holdings
24 hours access to your portfolio online
Access to our client team
Ongoing access to your advisor
Liaise with other professionals
Annual adisor discussion or review

You are provided statements at no cost to you by the platform .

Online access to your investments is provided at no cost to you by the platform.

the rest are only useful if you are going to be using them.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82123131#Comment_82123131

Having them in one place is simply a personal preference issue, and, as above, may not be ideal, or worth paying a premium for.

Growth is dependent on two things, i.e. what you're invested in (you can generally choose this) and the level of charges imposed by your platform(s) and fund(s), so these need to be identified and quantified before making any decisions you later regret…

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82123072#Comment_82123072

OK. You may want to check that if you do ditch the IFA sometime after all this is set up then you will be able to talk to Aegon direct - eg if you want to give them instructions to switch the investments. They won't insist on your doing it via an IFA will they?

If you are going to go ahead with the IFA you may want to ask what happens if your pension gets over a certain value - ie does the 0.95% drop if you get over £50k or £100k etc? Or is there a cap - eg the charge can't be more than £300 pa?

If you are going to be doing periodic transfers from your workplace pension you might want to check two things. First what charges are there on the workplace pension (how does that compare to 0.27% for Aegon)? And then what investment options do you have under the workplace pension and how do they compare to the Aegon options or what you actually are invested in with Aegon. At your age you may be all in on some global equity tracker. If that is what you have in both pensions then about the only reason to move money from one to the other would be the associated charges.

Albermarle

Although it has been mentioned I will reinforce the comments about investments.

Within each of those pensions, your money is held in investment funds. Normally with workplace pensions there is a range of funds to choose from - typically between 10 and 200. If you do not choose anything ( like >95% of people) your money goes into a default fund- a kind of middle of the road average type of fund.

The key point is that having your money in the right kind of investment fund that suits you/your age, is far more important than if you have 10 pensions or 2 pensions, which is largely only an admin issue. For example better to have 10 pensions with each invested in the right sort of fund, than one pension invested in the wrong sort.

So suggest you take a step back and learn some more about investing and investment funds. You will find at this level it is simpler than you might imagine, and then you might question the sense in paying someone to do it. Nothing wrong with IFA's, but not sure you really need one at this stage .

Also do not dismiss your current workplace pension, it might well be perfectly OK, especially if you tweak the investment choice.

bad_knees21

https://forums.moneysavingexpert.com/discussion/comment/82123255#Comment_82123255

Thank you for this. The IFA suggest Aegon as the charges are cheaper than I am currently paying. My current workplace pension plan also doesn't reflect my level of risk (which is medium / high)

bad_knees21

Thank you - this is incredibly useful!

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82123280#Comment_82123280

Presumably you can change the investment fund in your workplace pension to a one that suits you?

It could also be that one of your other pensions could be a suitable place to consolidate the others into.

Differences in charges of 0.1% or so, are not going to have a significant effect at this stage, whilst a 0.95% advisor charge will.