Pension advisor taking the ****?
Discussion
A close family member of mine has a pension pot of £110k, is 65 years old and has recently been speaking with a firm about her pension and what she should do with it. My worry is more that instead of thinking about a strategy for this pension, they've bamboozled a little bit and are potentially taking advantage of someone that doesn't really know very much about what they have, what they're being offered and what it all means.
The current fund is this https://markets.ft.com/data/funds/tearsheet/summar... - fees from what I can see are £30 a month, so about 0.3% per year...but there may be more I can't see, the online function is useless, clearly this is mostly bonds. Which we all know have suffered this last year.
What is being recommended IMO is a bit confusing on one hand given overlap, and far lower concentration on bonds, and the fee's to do it seem extortionate, this is what they're suggesting.
50/50 split across these
HSBC Global Strategy
Balanced Portfolio C Acc
https://markets.ft.com/data/funds/tearsheet/summar...
VT AJ Bell Balanced I Acc
https://markets.ft.com/data/funds/tearsheet/histor...
Charges to do this, given the 110k pot.
1% of pot ongoing to Aviva (I guess this company are an Aviva reseller or something?) per year
A fee for each of those those funds, approx 0.20% each per year
Aviva platform charge 0.20% per year
£2.5k advisor fee to make the switch one off
My concerns here are that those fees are collectively pretty lumpy, over 2% of the pot to click a few buttons, and then high ongoing fees vs what they have presently. All this sold on a few specific years of performance data vs the current investment choice. My other concerns are that these two funds they're recommending will have significant overlap, and are also very heavily geared to American equities (tech heavy). It seems quite risky for this stage of life and doesn't make much sense as to why both of those funds, but I haven't done in depth comparison, more a quick look.
I am not a pension advisor, or a financial advisor, but this person is a bit of a mug when it comes to finances, and this feels like they're taking the piss a bit. My feeling is that it could be quite easy to find something in the current providers fund list to match what is being proposed without all the fees, and this is where I think I am trying to push this conversation.
What do the PH finance heads think?
The current fund is this https://markets.ft.com/data/funds/tearsheet/summar... - fees from what I can see are £30 a month, so about 0.3% per year...but there may be more I can't see, the online function is useless, clearly this is mostly bonds. Which we all know have suffered this last year.
What is being recommended IMO is a bit confusing on one hand given overlap, and far lower concentration on bonds, and the fee's to do it seem extortionate, this is what they're suggesting.
50/50 split across these
HSBC Global Strategy
Balanced Portfolio C Acc
https://markets.ft.com/data/funds/tearsheet/summar...
VT AJ Bell Balanced I Acc
https://markets.ft.com/data/funds/tearsheet/histor...
Charges to do this, given the 110k pot.
1% of pot ongoing to Aviva (I guess this company are an Aviva reseller or something?) per year
A fee for each of those those funds, approx 0.20% each per year
Aviva platform charge 0.20% per year
£2.5k advisor fee to make the switch one off
My concerns here are that those fees are collectively pretty lumpy, over 2% of the pot to click a few buttons, and then high ongoing fees vs what they have presently. All this sold on a few specific years of performance data vs the current investment choice. My other concerns are that these two funds they're recommending will have significant overlap, and are also very heavily geared to American equities (tech heavy). It seems quite risky for this stage of life and doesn't make much sense as to why both of those funds, but I haven't done in depth comparison, more a quick look.
I am not a pension advisor, or a financial advisor, but this person is a bit of a mug when it comes to finances, and this feels like they're taking the piss a bit. My feeling is that it could be quite easy to find something in the current providers fund list to match what is being proposed without all the fees, and this is where I think I am trying to push this conversation.
What do the PH finance heads think?
Edited by okgo on Tuesday 10th January 12:02
Mazinbrum said:
Why would you pay an advisor fee to transfer it? You could transfer to interactive investor, pick those funds, pay no fees for 12 months and then £120 a year.
Alternatively speak to Intelligent Money who will pretty much do it all for you.
I don’t know what is normal, I’m 35. But yes, 2% of pot value felt punchy to me!Alternatively speak to Intelligent Money who will pretty much do it all for you.
Said person isn’t going to be able to manage it all, what’s the deal with IM?
okgo said:
Mazinbrum said:
Why would you pay an advisor fee to transfer it? You could transfer to interactive investor, pick those funds, pay no fees for 12 months and then £120 a year.
Alternatively speak to Intelligent Money who will pretty much do it all for you.
I don’t know what is normal, I’m 35. But yes, 2% of pot value felt punchy to me!Alternatively speak to Intelligent Money who will pretty much do it all for you.
Said person isn’t going to be able to manage it all, what’s the deal with IM?
Have a look at there website and maybe arrange a call with Nik.
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