personal pension-should I transfer??

jem16

EdInvestor wrote: »

It won't cost you anything to go to HL, they are also a discount broker.

I wasn't aware that HL did personal pensions. They only mention SIPPs and Stakeholders on their website. Plus as far as I know they don't discount on pensions so what would be the point?

Cavendish do have a discount on SW PP. However a lot of IFAs will also offer a discount on execution-only pensions. Discount brokers are just IFAs with a website.

DIY is fine if you know what you are doing. However it could cost you a lot more than fees if you don't.

Katakins

I will try a discount broker. It makes sense to me to try and keep as much of my money in my pension as I can rather than paying commission. As I am going for it now and trying to tackle this I may as well go whole hog and set it up myself and then research and pick my own funds.

Although I am new at this, the more I read the more I pick up and the more confidence I get. Thank you Ed Investor, jem 16 and donstonh

k xx

EdInvestor

jem16 wrote: »

I wasn't aware that HL did personal pensions. They only mention SIPPs and Stakeholders on their website. Plus as far as I know they don't discount on pensions so what would be the point?

Sorry I wasn't suggesting the OP use HL for a PP (though you can as they do have an advice arm, and it would be interesting if they would do the deal on an execution only basis.) I mentioned them simply because I had earlier posted a link to them.

Discount brokers are just IFAs with a website.

This is too simplistic.The primary business of a discount broker is to do execution- only business at a discount ( ie you get no advice and you don't thus pay for it.) They may have a separate arm which does offer advice but this is normally a minor part of the business.

With IFAs it's the other way round: they primarily offer advice - and charge you for it.They may occasionally also do a deal on an execution-only basis without advice - but this would normally be only for a client who otherwise did business on a paid advice basis. For most IFAs it would not be cost effective to do an E/O minor deal for a drop in client with no other connection.

It would also be a pain in the neck for a customer to have to ring round all the local IFAs and ask if they did e/o business, when they can just email the discount broker direct.

jem16

EdInvestor wrote: »

Sorry I wasn't suggesting the OP use HL for a PP (though you can as they do have an advice arm, and it would be interesting if they would do the deal on an execution only basis.) I mentioned them simply because I had earlier posted a link to them.

If you were not suggesting HL for a PP then why quote my post about not going direct to SW but use an IFA instead.

And why mention them again if you had already mentioned them?

It would also be a pain in the neck for a customer to have to ring round all the local IFAs and ask if they did e/o business, when they can just email the discount broker direct.

Exactly how long would that take then? 30 minutes at most and an instant answer rather than waiting for a discount broker to email back. Not exactly onerous Ed.

Are you afraid these nasty IFAs might just be able to offer a bargain over your beloved discount brokers?

EdInvestor

jem16 wrote: »

If you were not suggesting HL for a PP then why quote my post about not going direct to SW but use an IFA instead.

I quoted your post because I wanted to mention a discount broker (Cavendish) for the SW PP.

And why mention them again if you had already mentioned them?

Because in my earlier mention (regarding the SIPP) I hadn't said they were a discount broker.

Are you afraid these nasty IFAs might just be able to offer a bargain over your beloved discount brokers?

No, good luck to anyone who wants to shop around if they've got the time, but be prepared to hear that the IFAs don't do modest pension business on an e/o basis.In the OP's case, her business is of a decent size so they might well show interest, but I doubt on an e/o basis, they will want to give advice - and charge for it..

dunstonh

I will try a discount broker. It makes sense to me to try and keep as much of my money in my pension as I can rather than paying commission.

Not really. As was pointed out on a thread a few weeks back, two of the cheapest pensions you can get are not available through Cavendish.

Even if an IFA was to take maximum commission on these cheap pensions, they would still be cheaper than a stakeholder arranged on zero comission from Cavendish or similar.

With IFAs it's the other way round: they primarily offer advice - and charge you for it.They may occasionally also do a deal on an execution-only basis without advice - but this would normally be only for a client who otherwise did business on a paid advice basis. For most IFAs it would not be cost effective to do an E/O minor deal for a drop in client with no other connection.

It depends. I can undercut Cavendish on their terms really easily (i.e. charge the same but get better terms). However, there is no way on this planet I am going to turn into a factory line like they operate. That is their model and they are geared for that. If it was a larger fund and they wanted access to say Selestia with fund based trail rebating to make it cheaper than HLs SIPP then you would probably do it because you get ongoing trail, even if you rebate 0.25% of it. If they had £10k and wanted to do that then you wouldnt. A quiet IFA may do it but a busy one may not. An IFA is unlikely to be quiet this time of the year with the last minute ISA and pension rush.

In the OP's case, her business is of a decent size so they might well show interest, but I doubt on an e/o basis, they will want to give advice - and charge for it..

The OP seems more concerned about charges than investment returns. Not an ideal position. You end up worrying about 0.3-0.4% p.a. instead of the investments where a decent spread could make many percentage points difference. Once you get to those sorts of fund values, the money shouldnt be treated as an investment. However, if the quality of the investment doesnt matter than as it currently stands, an IFA can still undercut the discount brokers. This is mainly due to the discount brokers chosing not to update their products available on execution only basis.

Katakins

Dear Dunstonh,
I did not mean to give the wrong impression. You are quite right the quality of the fund is the most important thing. However I also wanted to consider charges as I appreciate these can impact significantly. It is tricky when you are not au fais with this . I get confused when I try and compare charges. Some seem to be on units purchased and some are annual fund charges and then my IFA would charge a commission of 3% on transfer sums and lump sums, 0% on reg premiums and 0.5% pa review payments.

Sorry I have gone back to charges again!! I will have a good look at the funds available in the SW pp.

k xxx

dunstonh

then my IFA would charge a commission of 3% on transfer sums

it is confusing as some commissions are explicit and some are not. If it was a SIPP or fund supermarket pension then a 3% commission is an explicit charge of 3% against your value. However, if it is a 3% commission on a stakeholder or personal pension then that is usually paid by the insurer, not by you. However, your annual management charge would reflect the fact that the insurer has paid a commission. It can take an insurer 10-20 years to recover that commission. Also, in the case of stakeholder or similar PPP,a 3% commission suggests around a 50% discount as the typical maximum is around 6%.

Sorry I have gone back to charges again!! I will have a good look at the funds available in the SW pp.

If you really do want to focus on low cost then probably Scottish Life and Clerical medical personal pensions can be the cheapest around. On full commission basis they beat the nil commission stakeholders if you have over 20 years to go to retirement. So, on a reduced commission basis they should come in a lot better. Both of these have external fund ranges which are not spectacular but for the basic investor should be fine.

macar_2

HI ANYONE
DON'T KNOW HOW TO GET MY QUESTION INTO THE FOCUS CAN YOU HELP , IM A LEARNER , THANKS IF YOU CAN HELP MACAR

jem16

macar wrote: »

HI ANYONE
DON'T KNOW HOW TO GET MY QUESTION INTO THE FOCUS CAN YOU HELP , IM A LEARNER , THANKS IF YOU CAN HELP MACAR

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