Views on Royal London Governed Portfolio

SMcGill
SMcGill Posts: 294 Forumite
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in Pensions, annuities & retirement planning
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?
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Comments

  • Audaxer
    Audaxer Posts: 3,506 Forumite
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    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
    SMcGill Posts: 294 Forumite
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    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
    SonOf Posts: 2,631 Forumite
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    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
    bostonerimus Posts: 5,617 Forumite
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    Audaxer wrote: »
    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?

    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.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • SonOf
    SonOf Posts: 2,631 Forumite
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    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
    Audaxer Posts: 3,506 Forumite
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    bostonerimus wrote: »
    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.
    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
    jsinc Posts: 306 Forumite
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    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
    SonOf Posts: 2,631 Forumite
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    Audaxer wrote: »
    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.

    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
    SMcGill Posts: 294 Forumite
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    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
    bostonerimus Posts: 5,617 Forumite
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    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.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
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