Standard Life is concerned that customers with smaller pensions may be put off from seeking advice altogether if they have to charge even when no move is made. That seems to be implying advice not to move your pension is worthless while advice to move is worth a fee.
The FCA is concerned that the business models of some firms may be commercially dependent on a proportion of clients transferring. It presumably feels that firms could reach a position where, after advising some clients not to transfer, the pressures increase to advise on a transfer.
Of course a good adviser will only want what is best for his or her clients. But it is not the good advisers we have to worry about, is it?
The power of dividends
Every so often an email drops into my inbox from Fidelity International showing the power of dividends.
The latest tells me that if you had invested £100 a month in the FTSE All Share Index over 30 years you would have £140,585 if you had reinvested dividends, but just £70,923 if you had taken them. That is roughly twice as much money.
But take off the initial investment of £36,000 and the actual return is £104,585, compared to £34,923 if you had taken the dividends. So reinvesting dividends would have roughly tripled returns over the past 30 years.
That is an astonishing difference, making a return of just under 8 per cent a year.
Over 20 years the return would be a tad over 7 per cent a year giving £51,674 for a £24,000 investment. Without the dividends you would have £34,907. So reinvesting would have boosted the return 2.7 times. Dividends are the power in any portfolio and we should never forget it.
Tony Hazell writes for the Daily Mail's Money Mail section
