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  • FIRST POST
    • SMcGill
    • By SMcGill 16th Jul 19, 5:40 PM
    • 36Posts
    • 6Thanks
    SMcGill
    Views on Royal London Governed Portfolio
    • #1
    • 16th Jul 19, 5:40 PM
    Views on Royal London Governed Portfolio 16th Jul 19 at 5:40 PM
    Hi

    So, I acted on the suggestion Dunstonh made to my post a few weeks ago to look at a more modern pension than the Standard Life one Iíve left ignored for the last 15 years. Iím happy I did as it made me really think about my needs, and now the IFA I found has recommended the RL Governed Portfolio 5 as a good match for my risk profile which apparently is 5. The IFA fee is £795 (their min charge Iím told) and the RL management fee is 0.5%.

    Before I go ahead, I just wanted to see whether anyone here would scream DONíT DO IT for any reason?
Page 1
    • Audaxer
    • By Audaxer 16th Jul 19, 6:07 PM
    • 1,795 Posts
    • 1,118 Thanks
    Audaxer
    • #2
    • 16th Jul 19, 6:07 PM
    • #2
    • 16th Jul 19, 6:07 PM
    Are you sure about the 0.5% charge, as looking at the fund on Trustnet it shows an Ongoing Charge of 1% per year?
    https://www.trustnet.com/factsheets/p/j8hz/royal-london-governed-portfolio-5-pn

    Is the IFA fee a one-off or is there also an annual charge?
    • SMcGill
    • By SMcGill 16th Jul 19, 6:12 PM
    • 36 Posts
    • 6 Thanks
    SMcGill
    • #3
    • 16th Jul 19, 6:12 PM
    • #3
    • 16th Jul 19, 6:12 PM
    1% is the basic charge, lower for transfers over a particular value.
    Yes, the IFA charge is a one-off, if I wish to have an ad hoc review this would cost £250 per time
    • SonOf
    • By SonOf 16th Jul 19, 6:14 PM
    • 723 Posts
    • 867 Thanks
    SonOf
    • #4
    • 16th Jul 19, 6:14 PM
    • #4
    • 16th Jul 19, 6:14 PM
    The IFA fee is £795 (their min charge I’m told)
    Many advisers operate a cap and collar model. i.e. a minimum charge and a maximum charge. The figure is reasonable.

    and the RL management fee is 0.5%.
    It is tiered with 1% being the opening figure but very quickly falls to 0.5% (something around 25k+) and goes further as the values increase.

    There is also a profitshare added to the plans that is not guaranteed to be paid annually but typically is around 0.15% a year. As a mutual, they return some of the profits. It is not anything to do with investment returns.

    Before I go ahead, I just wanted to see whether anyone here would scream DON’T DO IT for any reason?
    One of the biggest providers in the country. A simple contract with good governance and whilst not the absolute cheapest, it is right up there. A very simple option for people that dont want to go investing for themselves.
    • bostonerimus
    • By bostonerimus 16th Jul 19, 6:16 PM
    • 3,077 Posts
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    bostonerimus
    • #5
    • 16th Jul 19, 6:16 PM
    • #5
    • 16th Jul 19, 6:16 PM
    Are you sure about the 0.5% charge, as looking at the fund on Trustnet it shows an Ongoing Charge of 1% per year?
    https://www.trustnet.com/factsheets/p/j8hz/royal-london-governed-portfolio-5-pn

    Is the IFA fee a one-off or is there also an annual charge?
    Originally posted by Audaxer
    I was thinking the 0.5% was in addition to the fund fee, but the OP should double check all the IFA and platform fees over and above the actual fund fees.

    The fund looks to be around 60% equities and a quick comparison with VLS60 shows that VLS60 has a better 5 year average return......but that's not necessarily much to worry about.
    Misanthrope in search of similar for mutual loathing
    • SonOf
    • By SonOf 16th Jul 19, 7:40 PM
    • 723 Posts
    • 867 Thanks
    SonOf
    • #6
    • 16th Jul 19, 7:40 PM
    • #6
    • 16th Jul 19, 7:40 PM
    I was thinking the 0.5% was in addition to the fund fee, but the OP should double check all the IFA and platform fees over and above the actual fund fees.
    No. This is a personal pension and not a SIPP. The internal fund range of RL has no additional charges (or you could put it that there are no product charges and the 0.5% is the discounted fund charge)

    but the OP should double check all the IFA and platform fees over and above the actual fund fees.
    It's not a platform.

    The fund looks to be around 60% equities and a quick comparison with VLS60 shows that VLS60 has a better 5 year average return......but that's not necessarily much to worry about.
    Performance charts would assume the 1.0% default charge. Not the discounted charge. They would also not include the profitshare. VLS can only be bought via an investment platform and that would involve a platform charge.
    • Audaxer
    • By Audaxer 16th Jul 19, 7:45 PM
    • 1,795 Posts
    • 1,118 Thanks
    Audaxer
    • #7
    • 16th Jul 19, 7:45 PM
    • #7
    • 16th Jul 19, 7:45 PM
    The fund looks to be around 60% equities and a quick comparison with VLS60 shows that VLS60 has a better 5 year average return......but that's not necessarily much to worry about.
    Originally posted by bostonerimus
    Yes, and the RL fund over the last 5 years is not much ahead of the VLS40. I know it's easy in hindsight but it appears to be easy money for an IFA to just pick a multi asset fund to meet a particular risk profile. I wonder why the IFA would choose that particular multi asset fund.
    • jsinc
    • By jsinc 16th Jul 19, 8:12 PM
    • 181 Posts
    • 90 Thanks
    jsinc
    • #8
    • 16th Jul 19, 8:12 PM
    • #8
    • 16th Jul 19, 8:12 PM
    It's quite UK focused - equities and property in addition to bonds. Opinions differ on home country bias and not necessarily a bad thing. But that's something I'd want an IFA to explain. Could already be a result of your profile/preferences and discussions.
    • SonOf
    • By SonOf 16th Jul 19, 8:48 PM
    • 723 Posts
    • 867 Thanks
    SonOf
    • #9
    • 16th Jul 19, 8:48 PM
    • #9
    • 16th Jul 19, 8:48 PM
    Yes, and the RL fund over the last 5 years is not much ahead of the VLS40. I know it's easy in hindsight but it appears to be easy money for an IFA to just pick a multi asset fund to meet a particular risk profile. I wonder why the IFA would choose that particular multi asset fund.
    Originally posted by Audaxer
    The asset allocation is fluid and is volatility targetted. So, you shouldnt measure it against a static weighted multi-asset fund that moves around the risk profile.
    • SMcGill
    • By SMcGill 16th Jul 19, 9:15 PM
    • 36 Posts
    • 6 Thanks
    SMcGill
    A very simple option for people that dont want to go investing for themselves.
    Yes, that’s me ... happy making a simple choice, as long as it’s not a stupid one. My instincts on pensions are about as a good as a lemming’s instincts on cliff edges ��

    I plan on making a £50k gross contribution once the pension is transferred and would welcome advice on whether it makes any difference to tax relief if I do it all in one transaction or split it across financial years. I pay 40% on around £25k of my income.
    • bostonerimus
    • By bostonerimus 17th Jul 19, 1:41 AM
    • 3,077 Posts
    • 2,416 Thanks
    bostonerimus
    This RL pension might be ok, but it wouldn't hurt to really do some due diligence on the fees and vitally on how you will access your pension when the time comes. In my experience insurance companies love to hide fees and snow you with lots of jargon. So total up the obvious fees, try to see if there are any hidden ones and don't be swayed by terms like "profit sharing" when you should expect to get dividends as well as capital gains from most funds.
    Misanthrope in search of similar for mutual loathing
    • JoeCrystal
    • By JoeCrystal 17th Jul 19, 4:07 AM
    • 1,774 Posts
    • 1,233 Thanks
    JoeCrystal
    Hi

    So, I acted on the suggestion Dunstonh made to my post a few weeks ago to look at a more modern pension than the Standard Life one I’ve left ignored for the last 15 years. I’m happy I did as it made me really think about my needs, and now the IFA I found has recommended the RL Governed Portfolio 5 as a good match for my risk profile which apparently is 5. The IFA fee is £795 (their min charge I’m told) and the RL management fee is 0.5%.

    Before I go ahead, I just wanted to see whether anyone here would scream DON’T DO IT for any reason?
    Originally posted by SMcGill
    I used RL set up with an IFA as my personal pension with different RL Governed Portfolio fund. I am reasonably okay with it. It does do Profitshare Awards which add a little extra to the pot. They do have a management charge discount according to my paperwork at

    £0 to £34k: 0.10%
    £34k to £68k 0.50%
    £68k to £202k 0.55%
    £202k to £673k 0.60%
    £673k+ 0.65%

    Customer service-wise, they much prefer to work with and through advisers rather than direct. I see that you are thinking to make a single lump-sum contribution. Make sure you get a single contribution application form (or you can download it from RL adviser pages after googling it).
    Last edited by JoeCrystal; 17-07-2019 at 4:17 AM.
    • SMcGill
    • By SMcGill 17th Jul 19, 6:24 AM
    • 36 Posts
    • 6 Thanks
    SMcGill
    Customer service-wise, they much prefer to work with and through advisers rather than direct. I see that you are thinking to make a single lump-sum contribution. Make sure you get a single contribution application form (or you can download it from RL adviser pages after googling it
    Thanks, it’s important to know that as RL doesn’t state anywhere I need an IFA to pay into or access my plan but I’ve asked my IFA to clarify a few points about costs and fees so I’ll see what he says.

    .
    • Albermarle
    • By Albermarle 17th Jul 19, 7:50 AM
    • 1,187 Posts
    • 744 Thanks
    Albermarle
    I plan on making a £50k gross contribution once the pension is transferred and would welcome advice on whether it makes any difference to tax relief if I do it all in one transaction or split it across financial years. I pay 40% on around £25k of my income.

    The higher rate tax relief on pension contributions should be maximised where possible . However you can not get more relief that you actually paid in a tax year So ideally you should split the £50K over two tax years.
    However as you have a job/salary, then you must also be contributing to your workplace scheme , so already gaining some HRT relief. In which case you will have to split the £50K over three tax years to gain maximum benefit.
    • SMcGill
    • By SMcGill 17th Jul 19, 11:56 AM
    • 36 Posts
    • 6 Thanks
    SMcGill
    Thank you Albermarle!

    Yes, my total DB workplace pension payments last tax year were £11k so I need to take this into account.

    I’m a bit confused about the difference between pension annual allowance and pension input allowance and I’m not sure who to ask about this but I’ve started with asking the workplace pension scheme administrator for a pension statement.

    If I contributed in August, can HMRC adjust my tax code for the remainder of 2019/20 or am I more likely to see this applied to next years tax code?
    • Potboiler
    • By Potboiler 18th Jul 19, 10:20 AM
    • 10 Posts
    • 5 Thanks
    Potboiler
    One of the Vanguard Life Strategy products is usually the answer, despite the advisor's waffle.
    • Albermarle
    • By Albermarle 18th Jul 19, 11:40 AM
    • 1,187 Posts
    • 744 Thanks
    Albermarle
    I’m a bit confused about the difference between pension annual allowance and pension input allowance and I’m not sure who to ask about this but I’ve started with asking the workplace pension scheme administrator for a pension statement.
    The max anyone can contribute to a pension in one tax year is £40K . This includes your contributions + any tax relief+ employer contributions . If you have not utilised the full £40K in the previous two tax years , you can carry the unused part forward.
    However you can not claim back relief on tax , if you have not earned that much tax in the tax year , regardless of the above . eg
    You add £10K to your pension for the previous two tax years , so in theory you could add £100K , this tax year , but only if you earned at least £100K this tax year.
    In your case you should look to at least put enough in your pension to claim all the 40% tax you will pay . If you add more you will only gain 20% tax relief on that so less beneficial.

    If I contributed in August, can HMRC adjust my tax code for the remainder of 2019/20 or am I more likely to see this applied to next years tax code?
    yes they can adjust your tax code if you inform them either by phone or via the website.
    Be aware though they will automatically assume you will make the same contributions next tax year ,and adjust your tax code for next year accordingly .
    • SonOf
    • By SonOf 18th Jul 19, 12:18 PM
    • 723 Posts
    • 867 Thanks
    SonOf
    One of the Vanguard Life Strategy products is usually the answer, despite the advisor's waffle.
    Originally posted by Potboiler
    So, you want the OP to pay higher charges? Maybe it's you that is talking waffle.
    • SMcGill
    • By SMcGill 18th Jul 19, 2:57 PM
    • 36 Posts
    • 6 Thanks
    SMcGill
    You add £10K to your pension for the previous two tax years , so in theory you could add £100K , this tax year , but only if you earned at least £100K this tax year
    I’ve read about a calculation needing opening+closing amounts and involving inflation rate and a factor of 16 ... what’s this used for? Just in case it makes a difference to your answer, I have a DB pension scheme at work but the additional contributions will be to this new RL personal pension.
    • Albermarle
    • By Albermarle 18th Jul 19, 3:50 PM
    • 1,187 Posts
    • 744 Thanks
    Albermarle
    Just in case it makes a difference to your answer, I have a DB pension scheme at work
    I assumed you only had DC pensions .
    For DC it is easy to see how much is contributed to the pot each year.
    For DB it is more complicated because there is no pot as such , you are buying entitlement to benefits and it is more complex to calculate the value . I do not have experience of how this value is calculated , maybe another poster will help.
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