Pension consolidation advice/ideas
Discussion
First of all I appreciate that any 'advice' is full of caveats and down to individual circumstance, etc but I have been mulling on this for a while and am a bit stuck as to what to do...
In short, I have also been looking to consolidate some of my pensions and visited a local IFA for a free consultation and to see what they suggested. I now have the results and have been mulling over what to do.
The aim of the exercise is to end up with the largest possible pot when it comes to retirement.
After speaking to the IFA the value of the 3x pensions to be moved are around 100k (my current one will remain as I get the employer contributions added and there is a very small one that has a guaranteed payout that it currently more than its worth).
Their recommendation is that the 3x pensions are moved to their own discretionary management plan (I assume this would be some sort of robo platform plan picked based on my risk rating). For this they would charge 2% of the transferred value.
I would then be enrolled in their ongoing service option (0.75% per annum) which covers portfolio balancing, online access, that sort of thing.
Now, I have been mulling this over as I am also aware of pension bee (and similar) that lets you pick a plan and consolidate it online which makes me wonder what sort of 'value add' I am getting from their 2% of transferred value initial fee?
I could just do this myself via pension bee (or whoever) and save myself 2k or am I missing something?
The ongoing service option also sounds like easy money as how often does a portfolio actually get rebalanced and I imagine if it was on a robo platform then there would be some constant tweaking anyway from the various funds its invested in?
tl;dr Should I follow the advisors advice (at a cost) or should I just do it myself using one of the online platforms?
In short, I have also been looking to consolidate some of my pensions and visited a local IFA for a free consultation and to see what they suggested. I now have the results and have been mulling over what to do.
The aim of the exercise is to end up with the largest possible pot when it comes to retirement.
After speaking to the IFA the value of the 3x pensions to be moved are around 100k (my current one will remain as I get the employer contributions added and there is a very small one that has a guaranteed payout that it currently more than its worth).
Their recommendation is that the 3x pensions are moved to their own discretionary management plan (I assume this would be some sort of robo platform plan picked based on my risk rating). For this they would charge 2% of the transferred value.
I would then be enrolled in their ongoing service option (0.75% per annum) which covers portfolio balancing, online access, that sort of thing.
Now, I have been mulling this over as I am also aware of pension bee (and similar) that lets you pick a plan and consolidate it online which makes me wonder what sort of 'value add' I am getting from their 2% of transferred value initial fee?
I could just do this myself via pension bee (or whoever) and save myself 2k or am I missing something?
The ongoing service option also sounds like easy money as how often does a portfolio actually get rebalanced and I imagine if it was on a robo platform then there would be some constant tweaking anyway from the various funds its invested in?
tl;dr Should I follow the advisors advice (at a cost) or should I just do it myself using one of the online platforms?
KTF said:
First of all I appreciate that any 'advice' is full of caveats and down to individual circumstance, etc but I have been mulling on this for a while and am a bit stuck as to what to do...
In short, I have also been looking to consolidate some of my pensions and visited a local IFA for a free consultation and to see what they suggested. I now have the results and have been mulling over what to do.
The aim of the exercise is to end up with the largest possible pot when it comes to retirement.
After speaking to the IFA the value of the 3x pensions to be moved are around 100k (my current one will remain as I get the employer contributions added and there is a very small one that has a guaranteed payout that it currently more than its worth).
Their recommendation is that the 3x pensions are moved to their own discretionary management plan (I assume this would be some sort of robo platform plan picked based on my risk rating). For this they would charge 2% of the transferred value.
I would then be enrolled in their ongoing service option (0.75% per annum) which covers portfolio balancing, online access, that sort of thing.
Now, I have been mulling this over as I am also aware of pension bee (and similar) that lets you pick a plan and consolidate it online which makes me wonder what sort of 'value add' I am getting from their 2% of transferred value initial fee?
I could just do this myself via pension bee (or whoever) and save myself 2k or am I missing something?
The ongoing service option also sounds like easy money as how often does a portfolio actually get rebalanced and I imagine if it was on a robo platform then there would be some constant tweaking anyway from the various funds its invested in?
tl;dr Should I follow the advisors advice (at a cost) or should I just do it myself using one of the online platforms?
HiIn short, I have also been looking to consolidate some of my pensions and visited a local IFA for a free consultation and to see what they suggested. I now have the results and have been mulling over what to do.
The aim of the exercise is to end up with the largest possible pot when it comes to retirement.
After speaking to the IFA the value of the 3x pensions to be moved are around 100k (my current one will remain as I get the employer contributions added and there is a very small one that has a guaranteed payout that it currently more than its worth).
Their recommendation is that the 3x pensions are moved to their own discretionary management plan (I assume this would be some sort of robo platform plan picked based on my risk rating). For this they would charge 2% of the transferred value.
I would then be enrolled in their ongoing service option (0.75% per annum) which covers portfolio balancing, online access, that sort of thing.
Now, I have been mulling this over as I am also aware of pension bee (and similar) that lets you pick a plan and consolidate it online which makes me wonder what sort of 'value add' I am getting from their 2% of transferred value initial fee?
I could just do this myself via pension bee (or whoever) and save myself 2k or am I missing something?
The ongoing service option also sounds like easy money as how often does a portfolio actually get rebalanced and I imagine if it was on a robo platform then there would be some constant tweaking anyway from the various funds its invested in?
tl;dr Should I follow the advisors advice (at a cost) or should I just do it myself using one of the online platforms?
The adviser you have seen is at the low end price point for the initial advice (3% or 4% is common) and at the mid point for the annual fee (0.5% to 1% is the norm). If it was the adviser who identified you should not move your current pension due to employer contributions and that one of your other schemes had very generous guarantees then I think they have already earned their 2% (£2,000).
The 0.75% a year is a different matter and a bone of contention.
What are the costs of the investment management? The investment manager is doing the rebalancing, not the adviser.
IS their own DFM really the best option for you, or is it the best option for them? You say they are IFAs (therefore independent) but I am pretty sure there is nothing independent in advising you to invest with themselves...
Don't confuse this with robo (advice). That is completely different.
Without know who if providing the discretionary management and what the fees are for that I cannot offer anything further other than to say if they have highlighted you should not move two of these pension for the reasons stated (and you were not aware of this before hand) then they have already provided you with some great advice. I would not accept the 0.75% annual fee until you know what other fees you are paying for the discretionary management and perhaps not even then.
As I said, the rebalancing, online access, etc. This is all part of the discretionary management, not the advice.
0.75% over 20 years is 15% (or £15,000 plus growth). It might be better value to have 3 or 5 year reviews at an agreed price.
PM me if you don't want to share details here.
Cheers
Completely amateur view: I've opened a SIPP with Fidelity and moved 4 smaller pensions into it, leaving my current 'active' one with my employer running (for the same reasons as you). I can choose the funds (Fidelity has some 'easy' options or do it the hard way yourself), and manage it easily and have pretty low costs too. Seems a no brainer to me.
JulianPH said:
Hi
The adviser you have seen is at the low end price point for the initial advice (3% or 4% is common) and at the mid point for the annual fee (0.5% to 1% is the norm). If it was the adviser who identified you should not move your current pension due to employer contributions and that one of your other schemes had very generous guarantees then I think they have already earned their 2% (£2,000).
The 0.75% a year is a different matter and a bone of contention.
What are the costs of the investment management? The investment manager is doing the rebalancing, not the adviser.
IS their own DFM really the best option for you, or is it the best option for them? You say they are IFAs (therefore independent) but I am pretty sure there is nothing independent in advising you to invest with themselves...
Don't confuse this with robo (advice). That is completely different.
Without know who if providing the discretionary management and what the fees are for that I cannot offer anything further other than to say if they have highlighted you should not move two of these pension for the reasons stated (and you were not aware of this before hand) then they have already provided you with some great advice. I would not accept the 0.75% annual fee until you know what other fees you are paying for the discretionary management and perhaps not even then.
As I said, the rebalancing, online access, etc. This is all part of the discretionary management, not the advice.
0.75% over 20 years is 15% (or £15,000 plus growth). It might be better value to have 3 or 5 year reviews at an agreed price.
PM me if you don't want to share details here.
Cheers
Thanks for your thoughts. I was looking at consolidating my non-current pensions as I knew I would lose the employer contributions if I moved that one to their plan. I did not know about the smaller pension going to provide a payout larger than the current pot so they did highlight that.The adviser you have seen is at the low end price point for the initial advice (3% or 4% is common) and at the mid point for the annual fee (0.5% to 1% is the norm). If it was the adviser who identified you should not move your current pension due to employer contributions and that one of your other schemes had very generous guarantees then I think they have already earned their 2% (£2,000).
The 0.75% a year is a different matter and a bone of contention.
What are the costs of the investment management? The investment manager is doing the rebalancing, not the adviser.
IS their own DFM really the best option for you, or is it the best option for them? You say they are IFAs (therefore independent) but I am pretty sure there is nothing independent in advising you to invest with themselves...
Don't confuse this with robo (advice). That is completely different.
Without know who if providing the discretionary management and what the fees are for that I cannot offer anything further other than to say if they have highlighted you should not move two of these pension for the reasons stated (and you were not aware of this before hand) then they have already provided you with some great advice. I would not accept the 0.75% annual fee until you know what other fees you are paying for the discretionary management and perhaps not even then.
As I said, the rebalancing, online access, etc. This is all part of the discretionary management, not the advice.
0.75% over 20 years is 15% (or £15,000 plus growth). It might be better value to have 3 or 5 year reviews at an agreed price.
PM me if you don't want to share details here.
Cheers
On top of their 0.75% fee there will be product and investment fees on top (unknown at this time) which they say are higher than my current arrangements. I would also prefer the PAYG option as the 0.75% fee soon adds up.
From reading their emails they have given my 5 options but not actually seemingly pointed the finger at one in particular as it 'depends what I want to do'. I will try and pin them down but I suspect it will be to move the 3 to their service/platform rather than consolidate them into my current employer pension (which does allow transfers in).
My concern (for want of a better term) of that if I move to them I am 2% down from the off and each year it has to grow by more than 0.75% just to break even. Whether I would get this back because their choice of funds, etc would be 'better' compared to doing nothing is down to the crystal ball.
Edited by KTF on Friday 1st September 16:45
IMO DIY is the best way to go by far.
Just take your time and DYOR etc
2% is robbery as is 0.75% for doing something akin to wiping your arse.
Just ask questions, read forums, post and research. Keep to low cost providers and products and well known brands. HL, Vanguard and listed Investment trusts with long records etc.
Something like VWRL could well be a one stop shop. But unless you know why and how it relates to the following points keep researching..
Topics such as investment timescales, asset allocation, rebalancing etc need to be understood.
https://investor.vanguard.com/mutual-funds/low-cos...
Just take your time and DYOR etc
2% is robbery as is 0.75% for doing something akin to wiping your arse.
Just ask questions, read forums, post and research. Keep to low cost providers and products and well known brands. HL, Vanguard and listed Investment trusts with long records etc.
Something like VWRL could well be a one stop shop. But unless you know why and how it relates to the following points keep researching..
Topics such as investment timescales, asset allocation, rebalancing etc need to be understood.
https://investor.vanguard.com/mutual-funds/low-cos...
KTF said:
Thanks for your thoughts. I was looking at consolidating my non-current pensions as I knew I would lose the employer contributions if I moved that one to their plan. I did not know about the smaller pension going to provide a payout larger than the current pot so they did highlight that.
On top of their 0.75% fee there will be product and investment fees on top (unknown at this time) which they say are higher than my current arrangements. I would also prefer the PAYG option as the 0.75% fee soon adds up.
From reading their emails they have given my 5 options but not actually seemingly pointed the finger at one in particular as it 'depends what I want to do'. I will try and pin them down but I suspect it will be to move the 3 to their service/platform rather than consolidate them into my current employer pension (which does allow transfers in).
My concern (for want of a better term) of that if I move to them I am 2% down from the off and each year it has to grow by more than 0.75% just to break even. Whether I would get this back because their choice of funds, etc would be 'better' compared to doing nothing is down to the crystal ball.
Hi, I've just responded to your PM. Please ignore anything I said that is already covered in your post above. I'll send you another email.On top of their 0.75% fee there will be product and investment fees on top (unknown at this time) which they say are higher than my current arrangements. I would also prefer the PAYG option as the 0.75% fee soon adds up.
From reading their emails they have given my 5 options but not actually seemingly pointed the finger at one in particular as it 'depends what I want to do'. I will try and pin them down but I suspect it will be to move the 3 to their service/platform rather than consolidate them into my current employer pension (which does allow transfers in).
My concern (for want of a better term) of that if I move to them I am 2% down from the off and each year it has to grow by more than 0.75% just to break even. Whether I would get this back because their choice of funds, etc would be 'better' compared to doing nothing is down to the crystal ball.
Edited by KTF on Friday 1st September 16:45
Targarama said:
Completely amateur view: I've opened a SIPP with Fidelity and moved 4 smaller pensions into it, leaving my current 'active' one with my employer running (for the same reasons as you). I can choose the funds (Fidelity has some 'easy' options or do it the hard way yourself), and manage it easily and have pretty low costs too. Seems a no brainer to me.
Agreed.I in March I consolidated a bunch of pensions into a SIPP (H&L). I invested in a bunch of their wealth 150 funds, and I've seen about 10% growth since then.
I had an IFA review my four pensions earlier this year for a flat fee of £500.
That gave me more than enough information to decide what to do next, although have done nothing so far.
The IFA criticised one of my plans for having too high charges and then proceeded to suggest their own at more than twice the charges!!!!
My conclusion was that there are enough self service platforms and "lifestyle" plans to be able to do this myself.
That gave me more than enough information to decide what to do next, although have done nothing so far.
The IFA criticised one of my plans for having too high charges and then proceeded to suggest their own at more than twice the charges!!!!
My conclusion was that there are enough self service platforms and "lifestyle" plans to be able to do this myself.
It's the 'value' of the fee that I am stuck at.
For example (if I am wrong please correct me). They will have their own preferred platform (assume a robo) so will ask you various questions to determine your risk factor.
Having done that they then transfer your pension into the appropriate fund that matches your risk profile on their preferred platform. The platform does what it does and you hope the number gets bigger.
Now, in theory, I could do this myself via pension bee or whoever but there is a lot at stake if I mess it up as I can't live the PH dream on a state pension...
I am also a tight as a ducks arse and don't like spending money if there is no need
The default option is of course to do nothing but in my head the mass market employer type pensions will be 'average' compared to something that is more tuned to your risk profile.
For example (if I am wrong please correct me). They will have their own preferred platform (assume a robo) so will ask you various questions to determine your risk factor.
Having done that they then transfer your pension into the appropriate fund that matches your risk profile on their preferred platform. The platform does what it does and you hope the number gets bigger.
Now, in theory, I could do this myself via pension bee or whoever but there is a lot at stake if I mess it up as I can't live the PH dream on a state pension...
I am also a tight as a ducks arse and don't like spending money if there is no need
The default option is of course to do nothing but in my head the mass market employer type pensions will be 'average' compared to something that is more tuned to your risk profile.
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