Pensions - Transfer from company scheme to a private one

[Longy]

Can you separate the product cost, advice cost and fund manager cost?

Can you tell a client that SJP pay the fund manager the exact cost of the fund and receive no part of the cost of a fund?

Are the products easy in/easy out with no transfer/surrender charges?

The products are not transparent and anything but simple (as you stated).

P.S. I've worked in the independent financial advice sector for 35 years so I don't need the SJP holiday analogy horseshite.

Product/platform/advice is the 1.5%. The advice part is 0.5% which can be removed if wished. Meaning platform & product is 1%. Now if you’re comfortable & confident doing this stuff yourself, I wouldn't personally pay the 1% ad you can get platform charges much cheaper, but that’s not the reason why people use a financial adviser.

Fund management charges are roughly 0.5%, but it depends on what you have as all fund charges are different.

Pension is 100% invested on day one, easy in, has a surrender fee for the first 6 years, dropping 1% per year from 6% to 0%. That essentially is how SJP don’t lose money, because in theory you could set up a £1m pension transfer, invest 100% of the funds on day one with no charges & lose it on day two if the client decided to go to another company. Everything is done up front, analysis & implementation with no fees. Everyone is given a fee free 7.5% per year withdrawal allowance regardless, so a sufficient income can be taken for most if they are of a certain age. If you want your 25% lump sum, that can also be incorporated in the set up so that’s taken fee free. Basically, a conversation needs to be had first on what future plans are, it’s not always best to transfer.

No probs, not looking for a forum row, just passing on my view.

Neither am I mate. I’ll be honest though, it can be frustrating when people say stuff & you haven’t got a clue where it’s come from. That’s the issue with being a prominent name in any market, there to be shot at & everyone has a view, that’s sometime not quite accurate, that’s not me saying you by the way, just the nature of the beast.

I worked for a large high street bank for over 10 years & got the same thing.

 

[Old Prestonian]

Product/platform/advice is the 1.5%. The advice part is 0.5% which can be removed if wished. Meaning platform & product is 1%. Now if you’re comfortable & confident doing this stuff yourself, I wouldn't personally pay the 1% ad you can get platform charges much cheaper, but that’s not the reason why people use a financial adviser.

Fund management charges are roughly 0.5%, but it depends on what you have as all fund charges are different.

Pension is 100% invested on day one, easy in, has a surrender fee for the first 6 years, dropping 1% per year from 6% to 0%. That essentially is how SJP don’t lose money, because in theory you could set up a £1m pension transfer, invest 100% of the funds on day one with no charges & lose it on day two if the client decided to go to another company. Everything is done up front, analysis & implementation with no fees. Everyone is given a fee free 7.5% per year withdrawal allowance regardless, so a sufficient income can be taken for most if they are of a certain age. If you want your 25% lump sum, that can also be incorporated in the set up so that’s taken fee free. Basically, a conversation needs to be had first on what future plans are, it’s not always best to transfer.

There is nothing simple about that charging structure. There is no need for surrender/transfer penalties within products if a business is confident about its persistency rates. SJP products are based upon a sales model not an advice model which should have been consigned to the bin many years ago when the likes of Allied Dunbar and Abbey Life sales forces bit the dust.

You also didn't answer the question about whenther SJP retained any of the fund management charge or was it all passed on to the actual fund managment companies.

 

[taff]

Product/platform/advice is the 1.5%. The advice part is 0.5% which can be removed if wished. Meaning platform & product is 1%. Now if you’re comfortable & confident doing this stuff yourself, I wouldn't personally pay the 1% ad you can get platform charges much cheaper, but that’s not the reason why people use a financial adviser.

Fund management charges are roughly 0.5%, but it depends on what you have as all fund charges are different.

Pension is 100% invested on day one, easy in, has a surrender fee for the first 6 years, dropping 1% per year from 6% to 0%. That essentially is how SJP don’t lose money, because in theory you could set up a £1m pension transfer, invest 100% of the funds on day one with no charges & lose it on day two if the client decided to go to another company. Everything is done up front, analysis & implementation with no fees. Everyone is given a fee free 7.5% per year withdrawal allowance regardless, so a sufficient income can be taken for most if they are of a certain age. If you want your 25% lump sum, that can also be incorporated in the set up so that’s taken fee free. Basically, a conversation needs to be had first on what future plans are, it’s not always best to transfer.

Neither am I mate. I’ll be honest though, it can be frustrating when people say stuff & you haven’t got a clue where it’s come from. That’s the issue with being a prominent name in any market, there to be shot at & everyone has a view, that’s sometime not quite accurate, that’s not me saying you by the way, just the nature of the beast.

I worked for a large high street bank for over 10 years & got the same thing.

There’s also a significant initial charge (5%)? Plus early withdrawal charges in the early years

 

[Longy]

There is nothing simple about that charging structure. There is no need for surrender/transfer penalties within products if a business is confident about its persistency rates. SJP products are based upon a sales model not an advice model which should have been consigned to the bin many years ago when the likes of Allied Dunbar and Abbey Life sales forces bit the dust.

You also didn't answer the question about whenther SJP retained any of the fund management charge or was it all passed on to the actual fund managment companies.

So with that you’d have to ask individuals. SJP advisers use the products & support function made available to them by SJP. So I could sit next door to you, my business model could be a 100% salesman & you could be all about servicing existing clients, or vice versa. I dare say there’s a mix for the majority. It’s all about the person you’re dealing with there, but harsh to throw thousands of advisers into the same pot there. There are 100% SJP advisers out there that don’t look for new business & service existing clients using goals based modelling. I’d expect most advisers would always be looking for new clients, especially good ones.

As for the fund management charges, sounds like a loaded question, so I’m happy for you to correct me on this. But no, as far as I’m aware, SJP don’t retain fund management charges. The fund brief is created in house with the support of external consultants & funds managers are contracted in (not employed, that’s important) to manage a specific fund based on their skill set. They are paid for that service & monitored by the internal investment management committee, again using external consultants to support.

 

[Weremuthe]

I know there’s been a few threads on the general subject of pensions before but wanted to know people view on a specific matter, moving your pot from a company scheme to a private one.
Was taking to a collegue at work this week who has told me there are about to do just that as the private firm (St James’) perform much better than ours (Standard Life).
Anyone done this before ? What’s the pro’s and con’s?
I assume you still stay in the private one and contribute so you get the company contributions ? And just keep transferring the money over to the new private one?
Im just at the start of looking into this so any advice or articles to read would be appreciated.
Thanks

You can transfer some pensions which aren't draw down e.g. some finally salary pensions to a different pension provider which offers DD - but you've got to go through a process which costs upwards of £3/4K and you pay it whether it recommends whether you should move or stay put. If they say stay put and you still want to move it, you'll have difficulties getting anyone to move it.

Seeking registered advice is a must. Try the Govts website for help as well.

 

[taff]

I know there’s been a few threads on the general subject of pensions before but wanted to know people view on a specific matter, moving your pot from a company scheme to a private one.
Was taking to a collegue at work this week who has told me there are about to do just that as the private firm (St James’) perform much better than ours (Standard Life).
Anyone done this before ? What’s the pro’s and con’s?
I assume you still stay in the private one and contribute so you get the company contributions ? And just keep transferring the money over to the new private one?
Im just at the start of looking into this so any advice or articles to read would be appreciated.
Thanks

I tried to start a conversation with you but your inbox is full

 

[Longy]

There’s also a significant initial charge (5%)? Plus early withdrawal charges in the early years

No, not with pensions. Never ever an every charge, that’s why the early withdrawal fees are there, to enable advisers to do the upfront work free of charge & have 100% invested from the start. I’d say 95% of conversations around pensions consist of people who either can’t, or don’t want to drawdown in that time. After all, it is a long term plan for most. For that 5% it’s all about the plan & establishing whether it’s the right thing to do. Remember, there’s a 7.5% drawdown availability fee free anyway, so if you’re taking an income you’ve got wiggle room based on geveral drawdown principles & assumptions, everyone circumstances are different though.

You may be talking about general ISAs or unit trust though. The up front fee for that can be up to 5%. However it is completely down to the adviser what he/she sets their upfront cost at. Personally, I feel 5% is too high, so don’t go near that. Most IFAs move between 3%-4% I believe, but there’s that many out there that’s a real generalisation. No exit charges there. So flip that on its head, no exit charges means someone needs to get paid upfront for their work. There’s various amounts of admin & compliance behind the scenes before placing an investment if it’s advice based.

 

[Old Prestonian]

So with that you’d have to ask individuals. SJP advisers use the products & support function made available to them by SJP. So I could sit next door to you, my business model could be a 100% salesman & you could be all about servicing existing clients, or vice versa. I dare say there’s a mix for the majority. It’s all about the person you’re dealing with there, but harsh to throw thousands of advisers into the same pot there. There are 100% SJP advisers out there that don’t look for new business & service existing clients using goals based modelling. I’d expect most advisers would always be looking for new clients, especially good ones.

As for the fund management charges, sounds like a loaded question, so I’m happy for you to correct me on this. But no, as far as I’m aware, SJP don’t retain fund management charges. The fund brief is created in house with the support of external consultants & funds managers are contracted in (not employed, that’s important) to manage a specific fund based on their skill set. They are paid for that service & monitored by the internal investment management committee, again using external consultants to support.

My criticism of SJP is the corporate structure and product charges not the individuals working there. They could easily provide much more consumer friendly products which were not loaded to produce guaranteed profits. They have (to my knowledge) never answered the question about receiving a cut of the fund management charges after negotiating the deals with the actual fund managers which suggests to me that they must receive a share of the charge.

Every former IFA who I know that has joined SJP has done it for 'one last churn' of their clients money and this seemed to be actively encouraged by SJP.

 

[CollingwoodFTM]

Soz. I always do that.

Same here. You had me worried there, as I thought I’d finally got it the right way around.

 

[safccfas]

I tried to start a conversation with you but your inbox is full

Cleared

 

[Deleted member 30053]

Pensions specifically, it’s 1.5% + fund manager charges, usually approx 0.5%. Circa 2%, give or take a hundredth of a decimal point depending on the funds within the portfolio, but usually fractionally lower than the 2%. It’s that simple.

Compare it to a holiday, various parts make up the charge, flight, accommodation, various taxes, luggage, what’s important is the end figure.

Again, post #21, it all depends on what you’re after. Self execution, will be cheaper. I have 3 different platforms, all charge differently from each other.

It’s all about simply what you’re being charged at the end & what your net position will be after charges, will you have more or less in your pension. @Shirley Shammel put a cracking post on the other day about a fella being chuffed he avoided advice fees to return 3% last year when a structured portfolio of funds would have done anywhere between 15%-25% after charges.

There’s a very prominent poster on this thread who around 5 or 6 years ago was rubbishing my promotion of modern portfolio theory whilst simultaneously encouraging people to invest in the Standard Life GARS fund. Anyone who embraced modern portfolio theory and took out a portfolio predominantly investing in global equities would have returned between 60 and 80% on their money in those 6 years. During those 6 years we also saw once of the worst stock markets collapses of all time and yet investors still made those returns. Anyone who put their money into the Standard Life GARS fund would be struggling to break even after fees were taken and the fund has been decimated with eye watering outflows (well over half last I checked).

That in itself demonstrates that value of advice. I’m not saying everyone needs advice. Some people can make their own decisions very successfully but if you are not sure it’s best to see an adviser than click “like” on a post because someone is a “striker” on here and shouts louder.