stakeholder transfer

rwster

How do you transfer an identical stakeholder to a stakeholder done via a discount broker can anyone help

dunstonh

You don't.

Most providers will allow a change of servicing agent which is basically what you are asking for. However, the original terms will apply. They will not transfer a stakeholder with themselves into another stakeholder with themselves just to lower your charges. Your only option is to look for another provider.

Assuming you do choose another provider, the transfer discharge forms should be requested from the old provider and a transfer application sought from the new provider. If you are using a discount IFA, like you say, then ask them to get the paperwork. You may find that on transfers, the discount IFA may not be willing to do it on execution only or if they do, they may not offer it as quite as good terms. Transfers are considered higher risk and involve more work. Although stakeholder to stakeholder shouldnt really be a problem though. It would be best to check with the discount IFA first though.

Aark

About a year ago I transferred a Norwich Union stakeholder pension to a new Norwich Union stakeholder pension to reduce the charges. I used Cavendish Online, they might be able to help if you e-mail them.

Martin's article about this is on the site, but it is quite old. I assume it still works, as the updated stakeholder pensions article links to it at the bottom (Related Articles).

Have a look at http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1050842958,55132, - this is an extract:

Stakeholder Pensions.
As stakeholder pensions providers aren’t allowed to impose transfer penalties, just transfer your current plan to an absolutely identical one set up by the discounter, effectively keeping your existing plan but at a new lower charge.

EdInvestor

It's quite possible to switch all investments over to discounted terms, not just pensions.Indeed I believe one company (called something like "Intelligent Money" IIRC) for a small fee will take over all your investments and rebate the trail commission back to you every year.

I wonder how much money IFAs earn in trail commission from policies they sold 20 years ago? Most of the buyers (of endowments for instance) will have no idea that money is still being paid to someone they've not sighted for years.

dunstonh

Norwich Union are a good example of a provider that will not pay commission to move from one plan with them to another with them. If they will not pay commission, how do you expect them to rebate it?

Although the current NU stakeholder is dire and not a patch on the previous one so you wouldnt want to move it anyway.

whiteflag_3

EdInvestor wrote:

It's quite possible to switch all investments over to discounted terms, not just pensions.Indeed I believe one company (called something like "Intelligent Money" IIRC) for a small fee will take over all your investments and rebate the trail commission back to you every year.

I wonder how much money IFAs earn in trail commission from policies they sold 20 years ago? Most of the buyers (of endowments for instance) will have no idea that money is still being paid to someone they've not sighted for years.

Can you supply a list of the stakeholder pension providers that pay trail commission? Thanking you in anticipation :j

EdInvestor

Hello whiteflag

I don't believe I mentioned stakeholder pensions in my post about trail commission.:)

dunstonh

don't believe I mentioned stakeholder pensions in my post about trail commission

It's quite possible to switch all investments over to discounted terms, not just pensions.Indeed I believe one company (called something like "Intelligent Money" IIRC) for a small fee will take over all your investments and rebate the trail commission back to you every year.

You said pensions and this thread is about stakeholders.

EdInvestor

Sorry to annoy you chaps.

Telegraph link

This subject gets right up IFAs' noses, I know.

Perhaps things have changed since the company I mention was set up?

dunstonh

The only thing "that gets up my nose" is this complete rubbish that is spouted about renewal commission. You get articles whinging about up front commission then a few weeks later you get articles whinging about renewal commission. They need to make their mind up.

When an IFA does business, on many classes of business, the insurance company will give the IFA a choice of remuneration methods. The choice is often full initial commission or a reduced (or removed) initial commission and 0.5% fund based trail. Either option does not impact on charges. Its just a different way that the insurer provides the remuneration.

The 0.5% trail method with reduced initial usually takes 5 years to match the initial commission. After that the IFA will be in profit using that method rather than the full initial option. However, the risk is if the policy doesn't go 5 years. Insurers prefer the renewal commission method as they dont have to pay out initial commissions which then takes them many years to recover.

I take renewal whenever I can but if I ever felt that my renewals were at risk I would just take full initial commission instead. Most people I speak to prefer the renewal method as I have a vested interest in looking after the policy. Plus it helps pay for the visits, reviews and reports i send. Where I take no renewal commission, the person gets no ongoing servicing or reviews unless they pay for them on a fee basis.

However, that article has nothing to do whatsoever with stakeholder pensions which do not pay trail commission unless you take no initial commision. If you take no initial commision on a stakeholder, you would be looking around 10-15 years to break even with initial.

Midas

Okay, I've read Martin's article, in which he says:

"Stakeholder Pensions.
Asstakeholder pensions providers aren’t allowed to impose transfer penalties, just transfer your current plan to an absolutely identical one set up by the discounter, effectively keeping your existing plan but at a new lower charge."


A couple of questions:

i) How can you set up a new plan via a discount broker while you still have an existing plan. Do you have to cease payments to your original plan first? Surely you can only pay into 1 stakeholder in any one tax year?

ii) Why would a provider allow you to do this? Could they prevent it?

iii) If your provider did attempt to prevent it, could you transfer your fund to a different provider for a few months, then back to your original provider again (via the discount broker obviously).