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Pension ‘A’ or Pension Bee: Can You Plan Your Retirement Online?

Pension A or Bee

As a firm of Independent Financial Advisers (IFAs), we are often explaining the benefits of Pension Consolidation – how it untangles clients’ various pension plans and pools the funds into just one plan. Subsequently, we’ve had a couple of new clients ask us how we differ from businesses like ‘Pension Bee’ (if you watch TV you’ll have seen the various Pension Bee adverts circulating recently). Those questions inspired us to write this piece, because despite surface similarities, we differ a lot.

What is an IFA and what is Pension Bee?

Independent Financial Advisers offer ‘holistic’ advice spanning across pensions, investments and tax planning. IFAs help their clients make smarter financial decisions that lead to increased wellbeing, and ultimately, a better quality of life. Independent advisers have access to the whole of the market and can advise their clients on all investment products/funds with no restrictions.

Pension Bee ‘combine all of your old pensions into one new online plan’ and offer a really simplistic way to view your pension (and the transactions going in and out) online. They offer 7 pension funds for their clients to invest in. In exchange for simplicity, you have limited options.

How Do They Both Work?

IFAs have an initial meeting with their potential clients which can be face-to-face or over the phone/zoom. Within this meeting, we learn about you and what you’re trying to achieve in your short and long-term financial planning. We do some digging on any existing plans and consider whether the existing products are set up to help meet the goals of the client. If we aren’t confident that they are, we offer a recommendation to ensure pre-defined objectives are met. We organise plans to be as tax-efficient as possible to save excess money being lost unnecessarily. Then annual reviews are held to monitor progress and tweak plans to match any changes in circumstance.

Pension Bee’s approach is far less personal and relies on technology to on-board potential clients. Accounts are set up by the customer either on their phone or computer. Although they organise the transfers, their investment proposition is extremely basic and offers little in the way of actual retirement planning. They claim their 7 funds are ‘specially designed to suit different savings needs’, but there’s no mention of how they measure suitability. No life objectives are shared. No tax advice is given. No annual reviews are held to ensure pension plans are on track to meet life goals.

Pros

IFAs:

Big Picture, Comprehensive, Long-term Planning
Professional (Qualified) Advisers
Independent, Unbiased Advice
Bespoke Service
Personal Annual Reviews
Long-term Personal Relationships
Access to Whole of Market
Simplify Financial Complexity
Time-saving
Tax Efficient
Reassurance

Pension Bee:

Quick set-up
Digital service (App)
Easy to use platform
Viewable Pension Transactions
No minimum investment amounts
Streamlined Service
Cheaper – No initial Fees
Quarterly Fund/Investment Updates

Cons

IFAs:

More time commitment
Advice costs (pay more for more value)
Minimum Investment Amounts (usually)

Pension Bee:

No advice included (recommend seeking Independent Advice alongside)
Pensions only
Restricted Investment Options (only 7 plans to select)
No Tax Planning
No Personal Relationship (just chat support)
Risks of DIY if no advice taken (worry of getting it wrong)
No Annual Reviews/Future Planning

Conclusion

So ultimately, we’re talking about two completely different services here. IFAs advise you on how to organise your wealth to maximise growth and reduce potential tax liabilities. Pension Bee help you consolidate and view your Pension easily – with some equally easy investment options. IFAs learn what’s most important to their clients and help them prioritise and achieve their life goals – whether that’s buying a house abroad or switching careers. Achieving and maintaining a lifestyle of your choosing is the aim. We don’t just accumulate, we encourage clients to spend! Otherwise what’s the point in having money? It’s no good sitting in an account doing nothing. Life is what money should be spent on.

It completely depends on what you’re looking for. If you have unsubstantial pensions dotted all over the shop and just want them in one place, sure. Get the app and try DIY. But if you have significant wealth with all sorts of investment plans, you will need financial advice. Not just to maximise growth in your lifetime, but to maximise the amount your family can inherit when you’re gone.

So, do you want Pension ‘A’ or PensionBee? If you think you’d prefer the former, call one of our advisers for FREE on 01904 661140. They’ll talk you through PenLife’s advice process and see if we can help you attain the lifestyle you want!

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