If you do take the decision to transfer, then it is imperative that your pension fund is professionally invested. It is your life savings after all!
Quite simply, there are only ever two things that will affect the value of your pension fund: investment performance and charges. And so you should always look for good investment performance that comes with a reasonable charge.
Recently, the FCA, in the Asset Management Consultation Paper, made the point that over the years the vast majority of investment management firms that have charged excessively for access to their funds have not produced investment returns that have justified their high charges. If you paid £10,000 more for a car, you would expect to get a better car. Unfortunately the opposite is often the case with fund managers: the more charges you pay, the worse the product you get, simply because the higher charges make your returns worse.
Therefore at Kingsley Financial Consulting our approach is quite simple: we look for long standing companies who have produced consistently strong long term performance, and who have made the decision to significantly reduce their charges over recent years. Some companies have reduced their charges, some haven’t. Quite simply, we don’t recommend the companies that haven’t, because there is no research which suggests that this would be in our clients’ best interests.
Our guarantee to our clients is that the total charge of any pension portfolio, to include pension company charge and adviser charge, will never exceed 1% per annum. The industry average is 1.7%. It is your life savings, and it is better that as much as possible of it remains in your fund!