Pension fund consolidation advice

[TheMotorcycleBoy]

Hi all

I have (plus employers contributions) been paying into various pension funds for the past 25 years or so. This is what I have about now:

Aviva* 131.3k "my private pension, which was consolidated with an employers dormant scheme some years back"
Fidelity* 3.1k "my current employer's present provider"
Standard Life 41.1k "my current employer's earlier provider"
Scottish Widows 1.1k "my previous employer's final provider"
Halifax Financial Services 5.7k "my previous employer's initial provider"

I have put an asterisk next to the ones which are being contributed to currently. I wouldn't mind consolidating a few of them together, as you can probably imagine. What I have in mind is either merging the Scottish Widows and the Halifax Pensions into the Aviva or the Standard Life pensions. That will leave 3 separate schemes, 2 (the SL and AV) of which are now only to be contributed by me and are reasonably mature and the FID one which is a scheme recently started for joint contributions.

Now enter my "pension adviser". I do not directly pay him, however when I started my first private pension 25 years ago, it was he who introduced me to Norwich Union (which then became Santader, and is now Aviva), and I believe he is paid by my contributions (somehow?) via. the fees/costs charging structure.

I believe that my adviser, in addition to working with Aviva, is now also with Standard Life, since he is now trying to persuade me to consolidate everything, except my current employer/employee Fidelity scheme all into Standard Life. I did at first state that I was happy to merely consolidate the smaller ones (SW and HFS) into one of bigger schemes....(like I said earlier I'm content to keep tabs on 3 schemes), but he has come back with another suggestion of him merging my SL+AV+SW+HFS, all into SL.

I'm naturally a slightly cynical person, so I'm suspicious that he is perhaps getting a commission from SL based on all these previous schemes coming together, and perhaps ignoring my opinions very slightly.

What advice can people give me? Am I just being plain stubborn in not wishing him go ahead with his proposal? What pros and cons are there with either my 3 scheme (SL, AV, and FID) approach and his 2 scheme (SL and FID) idea? Is there much difference?

Furthermore, I imagine (I wouldn't know for sure, I've been largely ignorant of my pensions for the first part of my working life), that things are now much more transparent and accessible than they were in the mid-90s.....I assume that I don't really need to include my pension adviser anymore in the loop really (or should I?), as I assume that I should be able to execute a lot of the consolidating decisions myself, either over the phone or online.

many thanks, all advice appreciated,
Matt - husband of Mel

[xxd09]

Hi Melanie
You are right -he is making a living off your Pensions as will you when you retire.
How much do you want to get into it?
Without going in too deep you could put everything on hold for a year and do some learning
Would be a good idea anyway as you have smelt a rat -and you are probably right as I said above
It would at least mean you can ask sensible questions-like how much is it all going to cost?
This site is good.Monevator.com is also a useful website.Read some books.Do some Googleing
Good luck
xxd09

[Alaric]

It would at least mean you can ask sensible questions-like how much is it all going to cost?

It's plausible that Aviva would pay the adviser a commission as a percentage of the value transferred.

What's been suggested elsewhere on this site is that you take advantage of employer contributions by joining whatever scheme is on offer, but you have a parallel SIPP to consolidate everything from ex-employers and any additional contributions you might be making.

[TheMotorcycleBoy]

Without going in too deep you could put everything on hold for a year and do some learning
Would be a good idea anyway as you have smelt a rat -and you are probably right as I said above
It would at least mean you can ask sensible questions-like how much is it all going to cost?
This site is good.Monevator.com is also a useful website.Read some books.Do some Googleing
Good luck
xxd09

What's been suggested elsewhere on this site is that you take advantage of employer contributions by joining whatever scheme is on offer, but you have a parallel SIPP to consolidate everything from ex-employers and any additional contributions you might be making.

Thank you both. I'm not even too sure why I have a pension adviser associated with this scheme. I was incredibly naive, in my mid-20s when I started the Norwich Union scheme. I think I just assumed it was all part of the package with Norwich Union at the time.

This is the adviser
https://www.bridgeifa.co.uk/
like I mentioned I have had this association with him for the past 25 years or so. I'm now wondering if I should find ways to detaching him some how. I guess I need to get in touch with Aviva, since it is they who took on my Santander, and it was they who took over the NU scheme which this adviser setup all those years ago.

Anyway, it seems that perhaps I look into having a SIPP style arrangement, or just deal with the schemes directly.

Matt

[Chrysalis]

Ask the IFA directly what payment he is currently getting from your pension business. In writing.

You don't need him to consolidate your pensions, you can do it yourself. It should be easy to 'detach' yourself from him.
I once took out an ISA via an IFA (like you, I was young and didn't know any better, plus its much easier these days to DIY with so much info online).
I later discovered that he was still getting trailing commission about 12 years later! For which he wasn't even regularly getting in touch with me!
I just transferred the ISA to an online broker. I can't remember if I even told him.
Now I only use IFAs on an occasional fixed fee basis, and do everything myself. I've consolidated my spouses pensions, easy to do yourself, you just need to check that you don't have any guaranteed benefits and what the charges might be. Pensionwise has some basic info on transferring: https://www.pensionwise.gov.uk/en/transfer-pension

Just be aware though that at the moment there are special rules for cashing in 'small pots' which might be worth finding out about, if you are anywhere near the age when you could cash them in.

[TheMotorcycleBoy]

Ask the IFA directly what payment he is currently getting from your pension business. In writing.

You don't need him to consolidate your pensions, you can do it yourself. It should be easy to 'detach' yourself from him.
I once took out an ISA via an IFA (like you, I was young and didn't know any better, plus its much easier these days to DIY with so much info online).
I later discovered that he was still getting trailing commission about 12 years later! For which he wasn't even regularly getting in touch with me!
I just transferred the ISA to an online broker. I can't remember if I even told him.
Now I only use IFAs on an occasional fixed fee basis, and do everything myself. I've consolidated my spouses pensions, easy to do yourself, you just need to check that you don't have any guaranteed benefits and what the charges might be. Pensionwise has some basic info on transferring: https://www.pensionwise.gov.uk/en/transfer-pension

Just be aware though that at the moment there are special rules for cashing in 'small pots' which might be worth finding out about, if you are anywhere near the age when you could cash them in.

Thank you very much for this,

Yes, he's currently away, but when he gets back next week, I'll ask him. And I'll phone Aviva for their side of the story.

It's strange as this particular scheme has changed hands over the years, from NU -> Santander -> Aviva. So presumably the IFA just moved along with it....I never kept much tabs on it at the time. Other things to worry more about, kids, mortgages, work etc.

thanks again
Matt

[xxd09]

I was very much in your position many years ago.All with profits pensions with Norwich Union,Scottish Widows even Equitable Life!
Opaque charges,poor performance. I eventually discovered all tax relief -40% in those days -being taken by the Pension provider!
Transferred all the monies to one SIPP run by me
Reading and learning all the time off boards like this-20 years of study-do you have time?
Now in three funds only-Index Trackers with Vanguard cheap
Will you be able to take this on?
A fee based IFA might be better
All a bit of a thought at this stage of the game but one year or so won’t make much difference at this stage so study and see if you are up for it
Running your ideas past an IFA will keep you on track
The great motivation is that it is your money -if you don’t handle someone else will and it will cost!
An incentive-there are large savings to be made so it is worthwhile for a better retirement
xxd09

[uspaul666]

Three more simple things to add to what’s already been said:
1. Look up “trivial commutation” -might be helpful if you’re close to 55.
2. It can be useful to take different pensions at different times although you need to be sure small pensions don’t “evaporate” due to charges.
3. Do not for a second feel any need to treat the IFA “fairly” and keep them going out of a duty. They’ve already done very well out of you so far. It’s just business! Look at it dispassionately and move on if you want to.

[TheMotorcycleBoy]

Thanks again, cripes lots of ideas to chew on here....
We are already trying to learn how to invest, now need to gem on pensions too!

[Chrysalis]

Learning about pensions is mostly about learning to invest. What xxd09 suggests is not difficult, it won’t take 20 years to learn (but it might take one or two).
Look at the pensionwise website for basic orientation. For investing, nothing comes close to monevator.com in my opinion.
Trivial commutation is for defined benefit pensions, it’s the ‘small pots’ rule you want to learn about for defined contribution pensions.

[JohnB]

If you had your own SIPP you'd get more control, choice and lower fees but it would cost between 100-200 pa to run. You'd need more than £30k in it for the probable 0.5% fee saving on passive funds to be worth while.

I'd merge the 3 dead schemes into that SIPP (check for special benefits that might be lost) and then ask Aviva whether they do partial transfers for your scheme. If they do there is no reason why you shouldn't move 120k into your SIPP, and move further sums across as they build up. Its all too easy to feel that you need to be loyal to your current employer's scheme, even when its costing you money.

[TUK020]

Some employers are not precious about their own scheme, and will make the employers contributions into any valid pension scheme.
If you set up a SIPP, and transfer the dead-end pensions into it, it is then worth asking your employer if they would contribute into that SIPP.

[TheMotorcycleBoy]

Some employers are not precious about their own scheme, and will make the employers contributions into any valid pension scheme.
If you set up a SIPP, and transfer the dead-end pensions into it, it is then worth asking your employer if they would contribute into that SIPP.

I'm 99% sure my employer won't permit this. I'm in an large multinational corporate bureaucracy alas! But thanks all the same.

If you had your own SIPP you'd get more control, choice and lower fees but it would cost between 100-200 pa to run. You'd need more than £30k in it for the probable 0.5% fee saving on passive funds to be worth while.

I'd merge the 3 dead schemes into that SIPP (check for special benefits that might be lost) and then ask Aviva whether they do partial transfers for your scheme. If they do there is no reason why you shouldn't move 120k into your SIPP, and move further sums across as they build up. Its all too easy to feel that you need to be loyal to your current employer's scheme, even when its costing you money.

Ok - thanks for this.

It looks like the conclusion for now is to hold tight until I've researched SIPPs in some depth? But what about if for the time being I (i.e. not my IFA) get in touch with either Aviva (my active private plan) or Standard Life (recently dormant employee/employer scheme) and see if I can move those 1.1 (SW) and 5.7 (HFS) lumps over into one of those bigger plans? Or seeing as I'll probably have more confidence (i.e. done more research) in SIPPs in a year or so, is it not really worth it both from effort and charges viewpoints?

Matt

[JohnB]

You'll need to go through the bother some time, so you might as well get the ball rolling moving the small fry. monevator.com is the place to read about SIPPs, broker comparisons etc. I had no bother with SW, Aviva and SL transfers to my SIPP. Only some providers have transfer in charges, so the order matters. (And Hargeaves Lansdown occasionally have cashback offers when you transfer in)

I'm wary of IFAs. If you know enough to confirm their advice is sensible, you don't need them, and their high charges. Unlike doctors and lawyers, who's in depth knowledge is invaluable when you might have a rare condition, if your finances are simple, working out a plan is too.

[xxd09]

IFAs are the only financial adviser available to have a fiduciary responsibility to their client like doctors and lawyers
They cannot tell a lie
As you get more knowledge -run your SIPP Portfolio past a IFA
They will give you a free first consultation usually to get your business
If there are large holes in your ideas -you will be wrong-they will tell you-do some more study
If you are on the right lines they must tell you that your Portfolio is OK though they can then suggest alternatives(no doubt more expensive ones !)
This process can be repeated with different IFAs till you are confident enough to go-a cost free exercise !
I did it a couple of times
xxd09

[TheMotorcycleBoy]

You'll need to go through the bother some time, so you might as well get the ball rolling moving the small fry. monevator.com is the place to read about SIPPs, broker comparisons etc. I had no bother with SW, Aviva and SL transfers to my SIPP. Only some providers have transfer in charges, so the order matters. (And Hargeaves Lansdown occasionally have cashback offers when you transfer in)

I agree. I need to kick off the research. Probably in a few months though, since I'm not sure how much you read the share ideas/bond+gilts topics on the LF forum, but my wife (Mel) and I, started investing (yes I know it's a difficult time to start, markets being high etc.) back in March, so we are already spending much of that precious little free time we get researching in those areas. (And I have to say, we have learn a great deal from LF!).

(BTW, Thanks for the HL cashback tip)

I'm wary of IFAs. If you know enough to confirm their advice is sensible, you don't need them, and their high charges. Unlike doctors and lawyers, who's in depth knowledge is invaluable when you might have a rare condition, if your finances are simple, working out a plan is too.

Fair comment. In vague agreement here - one thing I need to do ASAP is discover exactly how much of my contributions go towards him. Given his actual efforts over the past 20-25 years, presumably very little! I certainly hope so...

Matt

[swill453]

(yes I know it's a difficult time to start, markets being high etc.)

One of the advantages of consolidating your pensions into a SIPP is that the money is already invested in the market, and will have benefited from past rises to a greater or lesser extent.

So once you get your hands on it you're just moving it about to your preferred investments, rather than starting from scratch.

Scott.

[Urbandreamer]

I'm wary of IFAs. If you know enough to confirm their advice is sensible, you don't need them, and their high charges. Unlike doctors and lawyers, who's in depth knowledge is invaluable when you might have a rare condition, if your finances are simple, working out a plan is too.

Fair comment. In vague agreement here - one thing I need to do ASAP is discover exactly how much of my contributions go towards him. Given his actual efforts over the past 20-25 years, presumably very little! I certainly hope so...

Matt

You need to distinguish between FA (financial advisers) and IFA's. The latter you pay directly and know how much you pay. The former are paid in a far from transparent manner and you almost certainly pay more than you expect (I'm not going to conclude that you didn't get value for money).

You also need to form an opinion upon how much you need their services and the appropirate remuneration (and as JohnB implies, your ability to judge is inversly related to your need to use them).

I would also argue that you need to do some serious thinking about what we are all posting.

For example there is much talk about a SIPP. I have one which I use as an investment play thing*. If you are happy with index trackers then your Aviva pension might be as good a solution (I have one of those as well which I consolidated FSAVC's and a former DC into). NOTE I believe that you are limited to one company and one personal pension that you actively contribute to.

In your place I would also consolidate the DC pensions, but I wouldn't feel a need to use an adviser to do so. Indeed I am somewhat surprised that your current employer didn't consolidate the SL and Fid pensions or that your previous employer didn't consolidate Halifax and SW. I know nothing bad about any of the companies concerned, though I personally prefer the Aviva website and offering to the SW one that was previously contributed to by my employer.

*Funds intended for my retirment include, the state pension, a modest DB scheme, a corporate DC scheme (Aviva, invested in trackers), a SIPP and my ISA. The SIPP is slightly over 30% the value of the Aviva and 20% the value of the ISA.

[TheMotorcycleBoy]

You need to distinguish between FA (financial advisers) and IFA's. The latter you pay directly and know how much you pay. The former are paid in a far from transparent manner and you almost certainly pay more than you expect (I'm not going to conclude that you didn't get value for money).

As I'm now realising. Thanks for reminding me to write something to him today!

You also need to form an opinion upon how much you need their services and the appropirate remuneration (and as JohnB implies, your ability to judge is inversly related to your need to use them).

Very little, I think, in the past he's done little other than get me to do a questionnaire (risk profile) and then based on that pick a couple of funds. I'm sure I'm capable of doing that myself now......and probably always was, had I been more bothered to do the research. I just let my 20s, 30s, 40s woosh by, without considering my pension situations (though at least I did contribute reasonably).

I would also argue that you need to do some serious thinking about what we are all posting.

For example there is much talk about a SIPP. I have one which I use as an investment play thing*. If you are happy with index trackers then your Aviva pension might be as good a solution (I have one of those as well which I consolidated FSAVC's and a former DC into).

I'm not clear on your exact point here, Urbandreamer.

NOTE I believe that you are limited to one company and one personal pension that you actively contribute to.

Correct and 3 others which aren't currently being contributed to.

In your place I would also consolidate the DC pensions, but I wouldn't feel a need to use an adviser to do so.

Sorry to be slow - what do you mean by a DC pension?

Indeed I am somewhat surprised that your current employer didn't consolidate the SL and Fid pensions or that your previous employer didn't consolidate Halifax and SW.

My current employer did offer when we switched. For some reason, make then, I just procrastinated.....it was before I had uncovered where the other pensions of mine were actually at. One of them (due to my previous laziness/forgetfulness) did not actually have my last address.

I know nothing bad about any of the companies concerned, though I personally prefer the Aviva website and offering to the SW one that was previously contributed to by my employer.

Ok, sure. All I can really contribute to any such debate is that SL recently acquired Aberdeen I do believe. Wondered how successful (well informed etc) the whole thing was, and whether there was any trouble lurking there.

Matt

[pochisoldi]

Sorry to be slow - what do you mean by a DC pension?

Defined Contribution

cf "DB", "Defined Benefit" aka "Final Salary Pension".

PochiSoldi