Moving pension company

g_p_t

Just after a 2nd opinion, I currently have a pension with Zurich which i have had for over 20yrs (used to be Allied Dunbar) I know its in a balance fund. I have never missed a contribution which increases by 10% each year, i think its current value is around 30k.
My IFA who sold the policy to me originally called me and has advised i move it to a company called AEGON who charge a lower management fee, which I realize is not a bad thing, I have not agreed any thing yet is this the right thing to do ?

dunstonh

My IFA who sold the policy to me originally called me and has advised i move it to a company called AEGON who charge a lower management fee, which I realize is not a bad thing, I have not agreed any thing yet is this the right thing to do ?

A lot of IFAs used to be tied agents and it is generally the natural career path. However, one thing to be aware of is that whilst many increase their knowledge when they become IFAs, some do not and still operate tied agent style with the IFA tag. You can spot these usually by the limited investment recommendations. For example, single fund recommendations.

So, with that in mind, if the Scot Eq recommendation is in a single fund, I would be concerned. If it is in a spread of funds utilising an investment strategy, then that sounds positive.

Allied Dunbar plans are expensive but IFAs cannot just recommend transfers for transfer sake. It has to be justified. The FSA issued a guide called OP18 which basically encouraged IFAs to get their clients out of naff schemes into better ones. Transfers generally comply with that guide.

Without knowing your details, I would expect an old AD policy to be fairly easy to justify if the investment spread being utilised contains external funds. If it is a stakeholder pension or a basic investment selection (i.e. single fund) then I would be on guard because whilst AD plans are expensive, the transfer penalty means that the alternatives have to offer more than just internal funds (similar internal funds are available on the AD so why pay more to get the same). Also, the charges are mainly on contributions and if may be that making paid up and then using a stakeholder for future contributions is better. I will repeat though that if a spread of external funds is being used, I would be comfortable with that.

g_p_t

Many thanks for that speedy reply! I did ask and he said there would no penalty for moving from my existing pension, which i find a little hard to believe.
He did mention spreading over different funds.
I don't know much about pensions, he did spend a few hours explaining it all to me and what he said makes sense but im sure he not only doing it for my benefit!

dunstonh

Many thanks for that speedy reply! I did ask and he said there would no penalty for moving from my existing pension, which i find a little hard to believe.

You can verify this yourself very easily by phoning up zurich and ask them for your current value and transfer value. The difference is the transfer penalty if one. If there isnt then its a dead cert to get out but I would be surprised if there isnt one on an AD plan. Last AD ones I did had a transfer penalty.

g_p_t

I will do that tonight many thanks !

g_p_t

I Phoned with Zurich and was advised no penalty so i think i will go ahead with the transfer, will see tomorrow when my IFA comes over.

dmwg40

Hi

How did this go?

I have a AD pension just wondered how you got on

i just phoned about my value and transfer value and there was £4k difference