Do you know why pension provider funds provide less information than Stocks and Shares ISA providers? Am I missing something?

05 April 2022

Question by Richard

Hello,


I'm currently invested in the default fund of a defined contribution workplace pension scheme and considering whether to switch into other funds offered by the pensions provider. In terms of making this decision it is obviously useful to have as much information to hand about the funds. When investing in funds through an ISA you tend to get a prospectus potentially running into hundreds of pages and a Key Investor Document. However, with the pension funds you get a two page fact sheet which gives very limited information alongside a Key Features Document and illustration document (but these relate to the pension scheme more widely rather than specific fund information). Looking at the FCA Handbook etc there seems to be a big discrepancy with the amount of information that a pension provider needs to provide compared to ISA funds. Am I missing something or is it the case pension provider funds need to provide less information? If this is the case, do you know why this is, it seems you are doing the same thing of handing money to a fund?

Many thanks,

Richard


Answered by Adam McCallion

Hi Richard

Great question, although it would take pages to explain in full. The short answer is that most pension funds are a "mirror" of the underlying investment fund to meet pension legislation, tax law, alternate charge structures.

However, as you have a work scheme, you may again find what you are being offered is yet another version of the main underlying investment fund (often with a preferential charge basis) and when you search the ISIN or SEDOL number of the "sub fund", very little information is available in the public domain. If this is the case, search the main fund version to find additional collateral and then compare the master fund with your offered version in terms of holdings, charges etc. Differences should be small, and unlikely to be material to your decision making.

The other route is to lean on the pension administrator, and insist on greater information from which to make your decisions and if that fails, speak to your employer and get the information of the advisory firm that implemented the pension and request more information, which they should provide without cost, I would hope.

I hope this helps a little, regards and good luck

Adam

Answered by

Adam McCallion

Financial Adviser & Wealth Manager

I work with a broad range of clients, including mums and dads looking to build wealth and financial security, business owners looking for efficiencies and tax planning opportunities, and those approaching (or in) retirement seeking the best out of life after all the hard work is done!