BBC’s Panorama Exposes Need For Pension Fund Advice
Last night I watched the BBC’s Panorama programme, Who Took My Pension, which highlighted the difference between different pension companies charges. As an Independent Financial Adviser (IFA) this is something which I have known about for some time. Indeed, rules on “Hard Disclosure” came into effect over 15 years ago which forced pension companies to detail their charges and show the effect of those charges on the possible future value of the pension fund. A good outcome of this disclosure has been that it allows IFAs to compare the costs of the numerous pension schemes when advising our clients. You can view an example of this research below:
Pension Provider Comparison Report
Of course, cost is not the only factor when taking into account which pension provider to recommend to our clients. We have to take into account a number of factors and features that each pension provider offers. For example, there is no point in having the lowest charging pension provider to administer you pension fund investment if, as a by-product, you end up with particularly bad investment performance. For example, the seemingly lowest charged pension fund in the above report is Aegon. I have researched their Global Equity Fund performance against the sector average and you can see below how it has faired.
There can be merit in switching your historic pension funds from one provider to another as indicated in the BBC Panorama programme last night but extreme caution should be taken and I would recommend that you speak to your IFA about his. If you do not have an IFA then please contact us as we could carry this analysis out for you. Under no circumstances should you attempt to do this on your own. Some of the older and more expensive pension funds do have some valuable features such as Guaranteed Annuity Rate Clauses and it could be a real disadvantage if you were to give up these.
Call us now to discuss how a pension healthcheck will identify if which pension provider is likely to be best for you.
