Pension Advice
Discussion
For the second time in 10 years or so I've finally got around to looking at moving my underperforming (but not horrendously bad) pension. It's not worth a huge amount relative to my overall "estate" and forms a relatively small proportion of my retirement planning (with the rest being mainly property).
With the help of a new IFA I found a pension wrapper that seemed suitable, along with a selection of funds. At his recommendation I've set up a relatively modest monthly payment and plan to transfer in my current pension pot.
I've since had a good look at the figures, and I'm put off moving for the same reasons I was last time: CHARGES.
I can just about cope with the annual management charges on funds, or to administer the entire pension pot. But charges of:
30% of the first 12 months regular contributions, and 30% (x 12 months) of any future uplift.
4% of the transferred in fund value
...are just a bit too hard to swallow. For perspective, that is in the region of £6k on a £100k pot. It's not like the IFA takes on any of the risk is it?
I don't want to be paralysed into doing nothing, but I don't feel I'm getting value for money, especially if I'm going to be giving the IFA 4% of every future lump sum I might pay in, for doing not a lot.
Part of me is thinking that I must be able to find a better solution myself that doesn't involve paying a schedule of fees that look like:
0.4% Fund Management Charge
4% Financial Advisor Charge (on all lump sum transfers)
30% Financial Advisor Charge (on all regular contributions for the first 12 months)
What does everyone else do? Is there a "here is the cheapest SIPP on the market" link that I've missed?
With the help of a new IFA I found a pension wrapper that seemed suitable, along with a selection of funds. At his recommendation I've set up a relatively modest monthly payment and plan to transfer in my current pension pot.
I've since had a good look at the figures, and I'm put off moving for the same reasons I was last time: CHARGES.
I can just about cope with the annual management charges on funds, or to administer the entire pension pot. But charges of:
30% of the first 12 months regular contributions, and 30% (x 12 months) of any future uplift.
4% of the transferred in fund value
...are just a bit too hard to swallow. For perspective, that is in the region of £6k on a £100k pot. It's not like the IFA takes on any of the risk is it?
I don't want to be paralysed into doing nothing, but I don't feel I'm getting value for money, especially if I'm going to be giving the IFA 4% of every future lump sum I might pay in, for doing not a lot.
Part of me is thinking that I must be able to find a better solution myself that doesn't involve paying a schedule of fees that look like:
0.4% Fund Management Charge
4% Financial Advisor Charge (on all lump sum transfers)
30% Financial Advisor Charge (on all regular contributions for the first 12 months)
What does everyone else do? Is there a "here is the cheapest SIPP on the market" link that I've missed?
UpTheIron said:
For the second time in 10 years or so I've finally got around to looking at moving my underperforming (but not horrendously bad) pension. It's not worth a huge amount relative to my overall "estate" and forms a relatively small proportion of my retirement planning (with the rest being mainly property).
With the help of a new IFA I found a pension wrapper that seemed suitable, along with a selection of funds. At his recommendation I've set up a relatively modest monthly payment and plan to transfer in my current pension pot.
I've since had a good look at the figures, and I'm put off moving for the same reasons I was last time: CHARGES.
I can just about cope with the annual management charges on funds, or to administer the entire pension pot. But charges of:
30% of the first 12 months regular contributions, and 30% (x 12 months) of any future uplift.
4% of the transferred in fund value
...are just a bit too hard to swallow. For perspective, that is in the region of £6k on a £100k pot. It's not like the IFA takes on any of the risk is it?
I don't want to be paralysed into doing nothing, but I don't feel I'm getting value for money, especially if I'm going to be giving the IFA 4% of every future lump sum I might pay in, for doing not a lot.
Part of me is thinking that I must be able to find a better solution myself that doesn't involve paying a schedule of fees that look like:
0.4% Fund Management Charge
4% Financial Advisor Charge (on all lump sum transfers)
30% Financial Advisor Charge (on all regular contributions for the first 12 months)
What does everyone else do? Is there a "here is the cheapest SIPP on the market" link that I've missed?
Can you not just pay the IFA for his time (at an appropriate rate) and then invest in the SIPP with only the product provider's charges to pay??With the help of a new IFA I found a pension wrapper that seemed suitable, along with a selection of funds. At his recommendation I've set up a relatively modest monthly payment and plan to transfer in my current pension pot.
I've since had a good look at the figures, and I'm put off moving for the same reasons I was last time: CHARGES.
I can just about cope with the annual management charges on funds, or to administer the entire pension pot. But charges of:
30% of the first 12 months regular contributions, and 30% (x 12 months) of any future uplift.
4% of the transferred in fund value
...are just a bit too hard to swallow. For perspective, that is in the region of £6k on a £100k pot. It's not like the IFA takes on any of the risk is it?
I don't want to be paralysed into doing nothing, but I don't feel I'm getting value for money, especially if I'm going to be giving the IFA 4% of every future lump sum I might pay in, for doing not a lot.
Part of me is thinking that I must be able to find a better solution myself that doesn't involve paying a schedule of fees that look like:
0.4% Fund Management Charge
4% Financial Advisor Charge (on all lump sum transfers)
30% Financial Advisor Charge (on all regular contributions for the first 12 months)
What does everyone else do? Is there a "here is the cheapest SIPP on the market" link that I've missed?
??
Sidicks
sidicks said:
Can you not just pay the IFA for his time (at an appropriate rate) and then invest in the SIPP with only the product provider's charges to pay??
??
Sidicks
Sorry, should have been clear. The SIPP isn't being pushed by the IFA, that is just where my mind now is - that I can find a better deal for myself.??
Sidicks
Waht would be a fair hourly rate for an IFA out of interest, anyone got any suggestions?
PurpleMoonlight said:
So you have basically received the advice and now don't want to pay for it......
No, I have been recommended a product, and now that I have all the paperwork in front of me and a full breakdown of the fees I can see that they are far higher than I am willing to pay for the product. My IFA has broken down the time he has spent preparing his advice and sales pitch (and he's being pretty generous with how long he is taking, in his favour, including travel time across London when he brought the wrong forms etc), and also an hourly rate.
The commission based approach costs about 4x this - needless to say negotiations are ongoing!
IMHO - tell him to do one.
Those fees sound astronomical.
Usually you agree up front whether to pay hourly or on a commission basis.
So - you agreed to go commission.
He then gave you some horrendous advice (I have no idea but you need to say this).
Hence you aren't going to follow it.
What can he do about it?
He can't FORCE you to move your investments - it is only you who can do that!!!!
Then go and find another IFA. PM me if you want mine.
Clearly you aren't going to use this guy again.
Those fees sound astronomical.
Usually you agree up front whether to pay hourly or on a commission basis.
So - you agreed to go commission.
He then gave you some horrendous advice (I have no idea but you need to say this).
Hence you aren't going to follow it.
What can he do about it?
He can't FORCE you to move your investments - it is only you who can do that!!!!
Then go and find another IFA. PM me if you want mine.
Clearly you aren't going to use this guy again.
'Astronomical' is subjective, there are cases where a fee or commission of 4% may be justified if the value of the advice, the complexity and the time spent is justified. There are also occasions when 1% would be too much. In many instances, for small pots of client money, the time spent in researching, delivering and executing the advice will make paying (much at all) for advice pointless.
I have been spending the past 4 months refining my client service proposition in anticipation of changes in the way advice is offered and funded at the end of the year. The time left for advisers to imply that their time is 'free' and that there is no cost to the client are, thankfully, measured now in weeks and months. However, the client also now has to accept that if he wants a compliant, professional, well costed and justificable service.. it has to be paid for.
Just because this adviser and his costs/advice don't sit well with you, it doesn't mean that the principle is bad or that the advice itself is unsound. An IFA is a commodity in a consumer driven sector. Shop around and keep costs down across the board - I asked earlier why you wanted a SIPP.. if all I wanted to do was bimble to the shops in a car, why on earth would I need a Pagani?
(Ok, bad example - Ginge slaps himself senseless)
I have been spending the past 4 months refining my client service proposition in anticipation of changes in the way advice is offered and funded at the end of the year. The time left for advisers to imply that their time is 'free' and that there is no cost to the client are, thankfully, measured now in weeks and months. However, the client also now has to accept that if he wants a compliant, professional, well costed and justificable service.. it has to be paid for.
Just because this adviser and his costs/advice don't sit well with you, it doesn't mean that the principle is bad or that the advice itself is unsound. An IFA is a commodity in a consumer driven sector. Shop around and keep costs down across the board - I asked earlier why you wanted a SIPP.. if all I wanted to do was bimble to the shops in a car, why on earth would I need a Pagani?
(Ok, bad example - Ginge slaps himself senseless)
Just do your own research and forget paying anyone else IMO.
Take your time. You can also sign up with someone like H&L and take their "free" advise in their pamphlets.
They give run downs on their top 150 recommended funds etc. Not that Id necessarily do that.
But there are plenty of options out there that dont require you to hand over 30% of anything you payin/earn.
With the internet and information freely available paying middlemen who just read the same stuff that everyone else does is pointless IMO.
Take your time. You can also sign up with someone like H&L and take their "free" advise in their pamphlets.
They give run downs on their top 150 recommended funds etc. Not that Id necessarily do that.
But there are plenty of options out there that dont require you to hand over 30% of anything you payin/earn.
With the internet and information freely available paying middlemen who just read the same stuff that everyone else does is pointless IMO.
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