http://www.bbc.co.uk/news/uk-11452857

In one HSBC pension plan, £120,000 paid in over 40 years would result in fees and commissions totalling £99,900.

Sounds quite a lot but I don’t know how much money they should take; I choose to have a Hargreaves Landown SIPP as I believe that gives me the lowest costs.

I suspect what they mean is, if those charges (fees and commissions) had not been taken the additional growth achieved would have been £99,900. Otherwise that is a spectacularly expensive policy 😯

Another case of journalist not actually knowing what they are reporting on!

Also, this is a banks policy which generally are much higher in charges then, say, AVIVA.

Always see a IFA when taking out a Pension to get the best product for your own circumstances.

Always see a IFA when taking out a Pension to get the best product for your own circumstances.

The commission will go the the IFA instead of the provider

Yup, I’ve gone for a Hargreaves Lansdowne SIPP: Fees are about £25 for moving your money around and at least if I loose money I’ll understand why and have no one to blame but myself!!!
I reckon Standard Life made more out of my pension when it was with them than I did!

This thread could get very interesting after the BBCs Panorama programme later.

Let the bashing of the Financial Services begin again 🙄 (but I live in hope that it will be a balanced programme with some well informed journalism).

I choose to have a Hargreaves Landown SIPP as I believe that gives me the lowest costs.

I suggest looking at A J Bell as they put the bread on my table (and I’m told the fees are low).

Had I just put the money I was paying for an endowment into a bank rather than giving it to standard life i would have made more money than they gave me back.

AJ Bell are good, but you would want to take advice before going down this route.

On the whole Panorama was ok.

Equitable Life though are a closed company, which means they no longer accept new business. If a company doesn’t take new business how else are they going to make money other than charging more?

The lady really should have reviewed her pension (or rather the adviser who originally “sold” the pension should have contacted her to review the plan). By doing this these charges would have been picked up and she could have switched to a lower cost provider.

The first guy was investing with Fidelity who are not a specialist pension provider. Again, had this fund been reviewed the high charges would have been picked up.

The adviser that sold the old boy the pension with 10% initial commission should be kicked repeatedly in the bollocks – absolutely no need for those costs. Interestingly the company did not have the required permissions to advise on pensions, so the providers are also calpable in this miss selling because they are duty bound to ensure the adviser has the required permissions! A complaint to the FSA and FSCS may get some of this money back.

A good IFA is worth their fee and will be there reviewing your funds and answerable to you during the life of the plan, not just sell it and then never be seen again!

Whether fees are good value really depends on how much return the policy made over and above an equivilent policy?

But in the HSBC case – an average £3k invested pa generated fees of £2.5k pa – so only £500 pa was actually invested? Is this correct?

b r – true, but I would hope that with professional guidance the fees would be inconsequential because of the enhanced growth.

To be honest I can’t comment on that HSBC case; in 10 years I have never come across a policy that resulted in those kinds of fees, If I did I would be horrified!!

I suspect that, like I said in my first post, what they mean is that had those fees not been levied you would have an extra £xxxx worth of growth. These ways of showing the effect of the deductions are set by the FSA who regulate finical services and in my opinion are hugely confusing and misleading. In reality you’d probably find the deductions much, much lower.

They didn’t actually say what that £120k had grown into either. For instance, if it wax £300k that would be a reasonable return, but if it was only worth £100k then it would be a bit rubbish.

It would have helped if they had told the whole story, rather than the one side they presented.

But then, I am biased 😆

I suspect that, like I said in my first post, what they mean is that had those fees not been levied you would have an extra £xxxx worth of growth.

I don’t think that at all as the article is quite explicit. The thing is that there are up front costs and ongoing costs so after 40 years there’s a lot of money (hopefully!) attracting a %age cost.