We offer a suite of seven different advisory services to our clients, the most popular (by number of enquiries) of which is our Building a Retirement Fund service.
Clients approach us who have accumulated a number of different plans and for whatever reason have started to think to themselves that perhaps these pension plans are not as effective as they might be.
It easy with the number of job changes that are almost normal in a career these days to accumulate three, four, five or even more private pension pots.
Each might be invested in a slightly different way and from different pension plan providers, each with a different charging structure for the plans they provide.
It can be further complicated by the fact that each provider is sending an annual statement at a different time of the year and each constructed in a slightly different fashion (different growth rates and retirement ages for example); sometimes making it difficult to predict and project ultimate benefits.
So the typical client enquiry starts with “I have a number of different plans and I don’t know what they are going to provide to me when I retire, can you help?”
This is the starting point and often, as we ask more questions, we establish that very little of a practical value is really known about the plans.
Our Building a Retirement Fund advisory service is designed to ensure that even if our client knows relatively little about their pension plans then, after we had completed the delivery of our advice service, they would have a much better understanding of things.
We delight in linking the various plans to the clients’ attitude towards risk and reward in line with the duration to their expected retirement age. Explaining how different investment asset classes work and building a suitable investment model for them that reflects their views.
We can then show them what they might expect to get from their plans even if they have stopped contributing to most of them and also demonstrate the cost of building up further retirement benefits.
Part of our advisory service is to analyse their existing plans and comment and advise on the charges that are being paid and the continued suitability (or otherwise) of the plans that they have.
And here is where ‘what looks good?’ can be explained.
To my way of thinking if the existing pension plan is competitively charged, has a reasonably good range of investment funds available and is from a financially secure firm with a half decent administration offering, then why go to the expense of transferring this pot of money elsewhere?
What looks good to me is if the client can retain their existing plans and simply switch the underlying investment funds to reflect the investment modelling that I have described above.
There are occasions when it makes reals sense to transfer from old style pension plans into modern arrangements but this is by no means a given.
I reckon on about two out of three occasions our advice is to retain the existing plans and to simply restructure the investment funds.
This is why we charge an advice fee for these professional services because our clients then know they are paying us for the work that we do and that our motives are aligned with theirs.
We are not speculatively delivering advice (allegedly for ‘free’) simply to set the scene for a more expensive transfer of pensions perhaps in order to create a more significant fee for us.
What looks good might be to simply keep what you have.
