Pension

[petesgrayz]

I have paid into a pension for many years. I don't know much about finance so I asked a good friend for some advice. He told me it wasn't doing very well which I could tell from the yearly statements.
He put me in touch with a financial advisor who said he could make the pension work much better by moving it.
For setting up the deal and managing the fund the cost would be 5% set up fee + 1% per annum thereafter.
Does this sound normal.

[Maydup]

5% sounds quite high, find another local Financial Adviser - be sure its an independent one and get a comparitive quote. No harm in asking a second opinion.

[factor-fiction]

How do those annual management costs compare with your current management charge rate?
I would be cautious though- every financial adviser will probably claim to be able to do better than another

[woofgang]

I always think (and no offence intended) that if these financial advisors are so good with money, why aren't they well off themselves? I'd rather buy my financial advice up front, pay a fee and be done with it.

[factor-fiction]

It also depends how many years are left. If it'll be 20 years before he draws it then it's worth reviewing; if he plans to draw it in the next few years then it'll be better to leave it alone probably and choose the right annuity later

[petesgrayz]

Sorry my mistake. It's 3%.

[boxtops]

Is the one you're paying into a private pension, or a works pension?

[Old_Geezer]

I wish the work I did for employers would pay a living wage there and then and a further percentage again and again each year afterwards without me needing to do more. Ok for some.

[factor-fiction]

I don't really get that point, Old-Geezer- the 1% annual fee is for work that will be done each year to actively manage the money by moving in and out of different funds to get a good return and reflect the age and risk factors (e.g. as the pension date gets closer the money is often moved into less risky assets)

[Old_Geezer]

Whilst I have limited experience of financial advisors what I have suggests once they've advised you what to do with your money then that is it. It stays there. And the advisor gets their regular payment for having passed the business on. Don't see any further labour, just income. I guess if it is managed you may have a point but I wonder how much efffort is involved in moving umpteen accounts together anyway. A good move for one is a good move for the thousands of others too.

[factor-fiction]

I agree with you for things such as life policies or non-managed funds, O-G, but for a managed fund I'd rather have an active manager