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Beware the ‘rip-off’ pension funds

  • Mark Donnelly
  • September 16, 2018

You may have heard of the many pension scams around, but few people are aware of the poor-performing pension funds

with extortionate fees and exit charges – especially for overseas expats.

Industry experts expect the Financial Conduct Authority (FCA) to investigate the many firms who are routinely charging eye-watering fees and exit fees on pension savers – some cited as much as 25%.

The FCA will examine the returns from funds, many of which carry layers of punitive charges and have typically underperformed the funds which charge normal pension fees.

As cheaper, more flexible products are rolled out to new customers, the FCA are concerned that those in pensions sold over the last 10-15 years have been getting a raw deal with poor returns and sky-high charges.

Overseas clients saddled with highest charges

Thousands of expats could be trapped in poor-value pension funds as a result of dubious legacy selling practices by firms that impose hefty reductions when clients wish to transfer.

However, it’s not only the transfer fees which will come under scrutiny – some pension funds come with annual fees well over what is acceptable today and thousands of expats may be affected.

Hidden Fees

Some clients are even being told by some firms that there are no fees or commissions as they get paid by the pension provider. This is in fact not true as the pension provider takes money from the client’s fund to pay the firm.

It’s a widely held view by industry leaders that someone in a modern pension should be paying around a modest 1% annual charge and firms should be treating their clients fairly, reviewing all aspects of their product including fees and performance.

Could a modern, low fee pension boost your pension pot?

If you would like a free UK pension review please contact Brite who offer an annual fee which will not negatively impact pension fund performance. In addition, we provide full performance transparency so you can keep control of your financial goals.

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Brite Advisors Pty Ltd. is licensed in Australia with the ASIC (AFSL 337670). The Brite Advisors SA (Pty) Ltd is registered with the FSCA in South Africa under FSP number 51690. In the UK, Brite Advisors (UK) is a trading style of Basi & Basi Financial Planning Ltd. which is authorised by the Financial Conduct Authority (FRN 513993). Brite Advisory Group also has numerous pensions schemes, administered in Hong Kong, UK, Gibraltar and Malta.

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