Investment service costs

[boyse7en]

I've got a workplace pension. Very standard one, with employer paying in minimum legal requirement. They keep sending stuff about moving my other investments over to them, and as I have got an ISA doing nothing very much I thought it would be worth looking into.

On the pension company's website it says "Our pricing is completely clear and transparent, see how much you’ll pay for a Fully-Managed Investment Portfolio. Service Costs: 0.40%. Product Costs: Typically 0.76%"
And they then provide a calculator to work out how much a year their fees will be.

If i were to invest £10,000, it calculates their fees as £116 per year or £9.67 per month

How is that anywhere near 0.4%? or even 0.76%?

I don't understand how they make it that amount.
I'm sure it is me being dim, but how do you work it out?

[Sarnie]

£10,000 x 1.16% (0.76% + 0.40%) = £116

[boyse7en]

Sarnie said:

£10,000 x 1.16% (0.76% + 0.40%) = £116

Doh! Yep, me being thick

[JulianPH]

Who is the pension provider? At those costs the scheme does not remotely sound as if it is auto-enrolment compliant (max charges the equivalent of 0.75% a year).

[boyse7en]

JulianPH said:

Who is the pension provider? At those costs the scheme does not remotely sound as if it is auto-enrolment compliant (max charges the equivalent of 0.75% a year).

They are called True Potential Investor.
I've never heard of them except that they are the company my employer has appointed to run the pension scheme

[JulianPH]

boyse7en said:

JulianPH said:

Who is the pension provider? At those costs the scheme does not remotely sound as if it is auto-enrolment compliant (max charges the equivalent of 0.75% a year).

They are called True Potential Investor.
I've never heard of them except that they are the company my employer has appointed to run the pension scheme

True Potential are an established IFA platform provider and True Potential Investor is their newer direct to public platform.

They are also relatively new to pension operation and it appears they don't know the automatic enrolment legislation as as default scheme at that price point is in breach of the legislation.

It may be worth highlighting this to your employer as it is them who have responsibility for ensuring compliance with the rules and non-compliance can lead to large fines.

Basically they are very much over charging you for your workplace pension and if your employer has documentation to say the scheme is compliant (and they will) they can get refunds for you from True Potential.

[craig1912]

I think you will find the OP is talking about seperate investments from his workplace pension as he is referring to their fully managed investment account.

https://www.tpinvestor.com/pricing

their auto enrolment charges are

You’ll pay:
• A fund management fee to the fund provider you choose – starting at 0.31% per year, taken monthly from your investment
• A platform fee of 0.40% per year to True Potential Investments, taken monthly from your investment
• No admin fee
• No dealing charges
• No charges for impulseSave® top ups

Edited by craig1912 on Friday 16th November 12:28

[JulianPH]

craig1912 said:

I think you will find the OP is talking about seperate investments from his workplace pension as he is referring to their fully managed investment account.

https://www.tpinvestor.com/pricing

their auto enrolment charges are

You’ll pay:
• A fund management fee to the fund provider you choose – starting at 0.31% per year, taken monthly from your investment
• A platform fee of 0.40% per year to True Potential Investments, taken monthly from your investment
• No admin fee
• No dealing charges
• No charges for impulseSave® top ups

Edited by craig1912 on Friday 16th November 12:28

Ah, that makes sense!

The OP is looking at the charging structure of a different service from the same provider.