IFA - Newby Questions

[Pickled Piper]

Hi I'm about to engage the services of an IFA to go through some pension planning. I would need the IFA to go through the small print of the several pension plans I have acquired over the years and advise on what to do with them. I would also like the IFA to cast their eye over my general finances and give advice on life insurance etc.

I planning to locate an IFA by using the following website http://www.unbiased.co.uk/timesonline/

I would appreciate any advice on how to get the best out of the IFA, how I should prepare etc. I want to pay the IFA a fee rather than have a commission arrangement.

Any advice and or experiences appreciated from customers and from IFAs

Thanks in advance.

PP

[Beardy10]

I would think you are maybe looking to consolidate them ? Though if these are occupational pensions of the final salary variety I would leave them in situ, if the IFA advises otherwise regarding occupational final salary schemes I would probably walk away there and then.

Apart from that if you do want to consolidate I would ask him to recommend a couple of options and critique them both. Ideally you would want a choice of low cost which probably means less flexibility when it comes to investment choices and something a bit more expensive which gives you more options.

I would also ask them to show you some recommendations for funds and which sectors/regions they are recommending together with their reasoning for this.

[Edinburger]

Pickled Piper said:

Hi I'm about to engage the services of an IFA to go through some pension planning. I would need the IFA to go through the small print of the several pension plans I have acquired over the years and advise on what to do with them. I would also like the IFA to cast their eye over my general finances and give advice on life insurance etc.

I planning to locate an IFA by using the following website http://www.unbiased.co.uk/timesonline/

I would appreciate any advice on how to get the best out of the IFA, how I should prepare etc. I want to pay the IFA a fee rather than have a commission arrangement.

Any advice and or experiences appreciated from customers and from IFAs

Thanks in advance.

PP

Hi there, first thing to do is try to forget anything you remember from the above post by Beardy.

I work with IFAs every day of my life. Many are very professional but like every industry some aren't. He will explain which services he is authorised to offer and run through am intense fact find wth you in the first appointment, to understand your situation and analyse your needs.

Tips I'd give you are:

- You mention pension planning and he will ask for any paperwork and information you have on your pension plans so take those with you
- You need to consider how you want him to be remunerated: by fee or commision from any new business you take out
- The site you mention is useful, but also make sure the guy is well qualfied (G60 minimum), also look at how reputable his business is and don't be afraid to ask him for client references/recomendations
- Financial services is probably the most heavily regulated industry in the UK so you are very well protected and whatever advice he gives you will be double checked at the very least to ensure it is best advice
- Make sure he an independent inancial adviser and not a tied agent, etc.

Those are good starters. Most IFAs offer free first appointments so you can suss him out. Let me know what you think, and feel free to PM me on this topic if you like.

[Pickled Piper]

Thanks Chaps.

pp

[Pickled Piper]

musclecarmad said:

Pickled Piper said:

Thanks Chaps.

pp

I would only see someone if they were chartered - after all why wouldn't you?

fee based is good.

if you have final salary schemes you may be advised to transfer and sometimes for very good reason but really make sure you understand what you are being advised to do and why - they often have good spouses pensions, are guaranteed, are inflation protected within certain limits etc

if you have with profits pensions there may be an mvr so he will research that for you, if you have guaranteed annuity rates these can be valuable.

make sure you see his 'suitability letter' that he will write you highlighting his recommendations and why BEFORE you sign up to anything - this isn't a legal requirement so a lot of firms send the letter out after the business has been done but you should argue you want it before you sign anything

you want to check the charges that apply to your pensions and to his new suggestions

you should review your situation thoroughly every year with him

get him to look at all matters for you - he has a duty of care to do that anyway as things such as your income protection will matter to your pension for things such as waiver and the term it is written to.

also, make sure you have details of your corporate benefits from your employer such as death in service benefit, sick pay, any other benefits etc.

don't sign up on the day there and then take a weekend to sit down and read everything and fully digest it - don't be afraid to ask him simple questions no matter how trivial to ensure you fully understand things

check the fsa website as you can see his career history and if he has had any complaints about him

finally, don't worry about it - he will be used to people not knowing what they are doing and talking about so a good adviser will explain the process in detail - the one area people don't understand is pensions - and I provide pensions advice (generally to equity partners in big law firms) so I know what i'm talking about and have the relevant exams and a maths and finance degree. It is heavily regulated and he will look after you and congratulations on seeking advice - so many people don't seek advice and have st pensions and st lives in retirement because they thought they knew what they were doing (When they didn't) - you should learn a lot from your meetings.

Thanks.

all points noted.

pp

[Beardy10]

Edinburger said:

Pickled Piper said:

Hi I'm about to engage the services of an IFA to go through some pension planning. I would need the IFA to go through the small print of the several pension plans I have acquired over the years and advise on what to do with them. I would also like the IFA to cast their eye over my general finances and give advice on life insurance etc.

I planning to locate an IFA by using the following website http://www.unbiased.co.uk/timesonline/

I would appreciate any advice on how to get the best out of the IFA, how I should prepare etc. I want to pay the IFA a fee rather than have a commission arrangement.

Any advice and or experiences appreciated from customers and from IFAs

Thanks in advance.

PP

Hi there, first thing to do is try to forget anything you remember from the above post by Beardy.

I work with IFAs every day of my life. Many are very professional but like every industry some aren't. He will explain which services he is authorised to offer and run through am intense fact find wth you in the first appointment, to understand your situation and analyse your needs.

Tips I'd give you are:

- You mention pension planning and he will ask for any paperwork and information you have on your pension plans so take those with you
- You need to consider how you want him to be remunerated: by fee or commision from any new business you take out
- The site you mention is useful, but also make sure the guy is well qualfied (G60 minimum), also look at how reputable his business is and don't be afraid to ask him for client references/recomendations
- Financial services is probably the most heavily regulated industry in the UK so you are very well protected and whatever advice he gives you will be double checked at the very least to ensure it is best advice
- Make sure he an independent inancial adviser and not a tied agent, etc.

Those are good starters. Most IFAs offer free first appointments so you can suss him out. Let me know what you think, and feel free to PM me on this topic if you like.

So basically you are not recommending asking any questions to find out if the IFA has any idea about which investments to recommend ? There are literally hundreds of IFA's that will be able to answer all the questions you have suggested perfectly adequately. Regulation give you very little insight as to whether these people will really change your wealth for the better which is what you want them to do.

I'm pretty sure any IFA can come up with good references...I wouldn't put much faith in them, even a bad IFA can get lucky every now and again. Or of course they could just give you the references of a few mates that happen to be clients...does the regulator stop them doing that ?

Of that universe you need to find one that will be able to recommend and build a sound investment portfolio rather than just reading from a list of recommended funds or regurgitating what the major fund management groups or the press have to say. Pretty much every IFA will have a list of recommended funds, ask them for a copy of that list from say 1,3 and 5 years ago and look at how ALL those funds have performed. A good IFA will also have a rationale for those recommendations so see if that rationale was right. That will tell you an awful lot more about them than the fact that the advice you have been given is double checked by their compliance department.

Finding one that isn't a tied agent is good advice.

Edited by Beardy10 on Tuesday 27th April 10:58

[Beardy10]

musclecarmad said:

Beardy, the first point is wrong! Yes, it's not normally a good idea to transfer out of a final salary scheme but there are perfectly good reasons for doing so depending on your attitude to risk, dependents, critical yield, term to retirement etc.

I am in a defined benefits pension but I will transfer out when I leave the company as i'm young and will transfer to a sipp if the transfer value is good because the deferred benefits accrual isn't great imho and I want to transfer to a SIPP so I have more say and control with my money and my attitude to risk is high so as long as the critical yield isn't massive I will transfer.

(nb, OP, 90% of financial advisers don't understand pensions at all - they are just salesmen, so my chartered point shouldn't be taken lightly). I was speaking to a guy the other day that didn't know what some of the terms I am using was and he was a financial adviser with ten years experience.

The decision to opt out is obviously driven by the transfer sum you they are prepared to pay you and what your assumptions are about investment returns....so obviously if you are prepared to accept high risk investments, feel you can manage them yourself it may work for you. I have a SIPP and an final salary scheme from an old job, personally I think having both is a good balance. If you opt out the big risk you have is your exposure to annuity rates when you retire, obviously you can make assumptions about that but that is hugely risky in my opinion, I would certainly assume lower rates than now to be defensive.

The calculation is fairly simple.....what you will get paid to opt out, what investment returns you expect to make in the years until your targeted retirement age and then what that amount has grown to at your expected returns will buy you as an annuity. I doubt the sums will add up if you are being realistic, which is why so many schemes are being closed and for most people it is best to stay in.