Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • shilts
    • By shilts 13th Nov 17, 5:23 PM
    • 44Posts
    • 1Thanks
    shilts
    Pension advice cost
    • #1
    • 13th Nov 17, 5:23 PM
    Pension advice cost 13th Nov 17 at 5:23 PM
    Can anyone please tell me roughly what I should expect to pay for pension advice from an IFA . This is to give me advice on my private pension and where to put future contributions . Also any ongoing charges , thanks .
Page 1
    • IanSt
    • By IanSt 14th Nov 17, 10:06 AM
    • 128 Posts
    • 82 Thanks
    IanSt
    • #2
    • 14th Nov 17, 10:06 AM
    • #2
    • 14th Nov 17, 10:06 AM
    I suggest you have a search through this forum for the many posts that have asked the same set of questions as you have.

    If you don't find your answer then come back with details on whether it is a DC or DB pension and how much it is worth. Someone may then be in a position to give an answer for your particular circumstances.
    • Malthusian
    • By Malthusian 14th Nov 17, 10:36 AM
    • 3,316 Posts
    • 5,057 Thanks
    Malthusian
    • #3
    • 14th Nov 17, 10:36 AM
    • #3
    • 14th Nov 17, 10:36 AM
    Depends on the IFA and how big the private pension is. If your private pension is a defined contribution / personal pension, 3% of the existing fund up front and 0.5% per annum is still the benchmark. The initial fee can often be negotiated below this, depending on the size of the private pension.

    Some charge more, some charge less and you will need to shop around.

    If it's advice to transfer out of a DB pension you're after, then it will be a lot more *edit* than advice on a DC scheme and you can expect less scope to negotiate the price down.
    Last edited by Malthusian; 14-11-2017 at 12:31 PM.
    • pip895
    • By pip895 14th Nov 17, 11:58 AM
    • 430 Posts
    • 234 Thanks
    pip895
    • #4
    • 14th Nov 17, 11:58 AM
    • #4
    • 14th Nov 17, 11:58 AM
    If it's advice to transfer out of a DB pension you're after, then it will be a lot more.
    Originally posted by Malthusian
    This can be at those sorts of rates but there are people charging only ~ 1% even for this. You should be able to get much lower fixed rate charges for standard pensions advice though. Shop around!
    • Malthusian
    • By Malthusian 14th Nov 17, 12:32 PM
    • 3,316 Posts
    • 5,057 Thanks
    Malthusian
    • #5
    • 14th Nov 17, 12:32 PM
    • #5
    • 14th Nov 17, 12:32 PM
    Yes, my wording was poor the first time. I should have said that I meant more than just advising on a DC pension, rather than more than 3%.
    • xylophone
    • By xylophone 14th Nov 17, 1:32 PM
    • 23,464 Posts
    • 13,640 Thanks
    xylophone
    • #6
    • 14th Nov 17, 1:32 PM
    • #6
    • 14th Nov 17, 1:32 PM
    https://directory.moneyadviceservice.org.uk/en
    • shilts
    • By shilts 14th Nov 17, 8:45 PM
    • 44 Posts
    • 1 Thanks
    shilts
    • #7
    • 14th Nov 17, 8:45 PM
    • #7
    • 14th Nov 17, 8:45 PM
    Thanks for the help . I was wondering whether it was the norm to pay a fixed fee up front , an ongoing charge or indeed both .
    • bigadaj
    • By bigadaj 15th Nov 17, 6:35 AM
    • 10,725 Posts
    • 7,012 Thanks
    bigadaj
    • #8
    • 15th Nov 17, 6:35 AM
    • #8
    • 15th Nov 17, 6:35 AM
    Thanks for the help . I was wondering whether it was the norm to pay a fixed fee up front , an ongoing charge or indeed both .
    Originally posted by shilts
    It varies, typical process might be free initial meeting where you meet and discuss overall aims and goals and then ifa comes back with outline plan and costs.

    Anecdotally then typical charges vary 1-3% for initial fees and 0.5-1% ongoing charges.

    What's your situation and what are you trying to achieve, this will affect the charges and work, and if it's fairly simple there no reason you can't do it yourself.
    • dunstonh
    • By dunstonh 15th Nov 17, 10:33 AM
    • 89,603 Posts
    • 56,092 Thanks
    dunstonh
    • #9
    • 15th Nov 17, 10:33 AM
    • #9
    • 15th Nov 17, 10:33 AM
    Thanks for the help . I was wondering whether it was the norm to pay a fixed fee up front , an ongoing charge or indeed both .
    Originally posted by shilts
    For simple things or small value cases, typically you would go transactional (up front fee, no ongoing). For larger values or where you have periodic work (such as ad-hoc contributions) then ongoing is usually used.

    Upfront is for the initial advice. Ongoing is for ongoing advice.

    No right or wrong. Just preference. However, you may find more basic investments and products used for transactional stuff. Especially after 3rd Jan 2018 when MiFID II comes in. Firms should largely be doing it already but there is evidence to suggest some are not.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • pip895
    • By pip895 15th Nov 17, 12:08 PM
    • 430 Posts
    • 234 Thanks
    pip895
    In most circumstances you can DIY the information you need and use free help (not advice lol) available from companies like Hargreaves Lansdowne to, for instance, consolidate lots of small defined contribution pots.

    You don't need to worry about them telling you to transfer things that shouldn't be transferred because the area is so highly regulated. When I used them for instance there was one policy that had a guarantee that we couldn't transfer across and they were very upfront about it and suggested we didn't transfer that one.

    You can save yourselves a fortune by spending a bit of time educating yourself and making a few phone calls.
    • shilts
    • By shilts 16th Nov 17, 9:19 PM
    • 44 Posts
    • 1 Thanks
    shilts
    Thankyou for your help . I have just heard back from one advisor who has quoted me :-

    Free initial meeting
    Initial fee - 3%
    Ongoing - 0.75-1%

    I currently pay into a company pension which I don't really want to touch and have a personal pension which I haven't paid into for years and is relatively small (just under £50000) . In addition to this I want to pay in a further £200 a month into a pension . So basically I want to know the best place for the £50000 plus the £220 month to be for my circumstances . I would think this would be quite straight forward so does 3% seem reasonable ? Not sure if I would need ongoing or not given the relatively small sum , thanks .
    • pip895
    • By pip895 16th Nov 17, 9:47 PM
    • 430 Posts
    • 234 Thanks
    pip895
    Could you pay extra into your company pension? That is often the most efficient method if its available.

    Another possibility might be to transfer the £50,000 into a SIPP and add the monthly payments to that.

    If you are happy to do a bit of research it isn't difficult putting together a suitable portfolio.
    • shilts
    • By shilts 16th Nov 17, 10:09 PM
    • 44 Posts
    • 1 Thanks
    shilts
    Thanks . I can pay extra into an AVC but these have not had particularly good returns . Not knowing much about all this I will certainly look into a SIPP . It's a bit of minefield to me to be honest and I really want to make sure that the right decision is made to maximise my pension . Nearly £1500 does seem rather expensive to me given what I need done but I guess this is the cost , thanks .
    • dunstonh
    • By dunstonh 16th Nov 17, 10:26 PM
    • 89,603 Posts
    • 56,092 Thanks
    dunstonh
    Personally, with £50k value, I wouldnt go with ongoing advice with the adviser. Stick with transactional. You can still use the adviser again later. But at £50k, you dont really need a yearly review.

    Nearly £1500 does seem rather expensive to me given what I need done
    Pension switches are a relatively high risk to an adviser. Most PI insurers ask specifically about the number of pension switches a firm does and adjust their premiums accordingly. Its a good chunk of work and needs third-party software and they are something the FCA always look at on visits. £1500 does not sound unreasonable. you can get cheaper but its in the ballpark of what you would expect.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Malthusian
    • By Malthusian 17th Nov 17, 11:24 AM
    • 3,316 Posts
    • 5,057 Thanks
    Malthusian
    Thanks . I can pay extra into an AVC but these have not had particularly good returns.
    Originally posted by shilts
    What pip895 was driving at was whether the employer will match your contributions if you pay more in to their scheme, or whether they offer salary sacrifice (which means you save NI as well as income tax).

    The returns in an AVC should be little different to any other pension wrapper, even if the fund choice is more restricted.

    Is it 0.75% ongoing or 1%?
    • shilts
    • By shilts 17th Nov 17, 6:08 PM
    • 44 Posts
    • 1 Thanks
    shilts
    Thanks dunstonh, this is helpful .

    Malthusian . I currently pay a fixed 4.5% into my company pension whilst they make it up to 16% . There is no option to add further . There are two options for ongoing advice . 1% is for all the advice elements plus an annual review . 0.75% all the advice elements less the annual review , thanks .
    • Alexland
    • By Alexland 17th Nov 17, 7:58 PM
    • 690 Posts
    • 430 Thanks
    Alexland
    Another option to consider if you want to transfer into and/or contribute to a simple pension with a good default investment strategy and low fees is the Aviva stakeholder.

    Usually you can only get this via an IFA but Cavendish will set it up for you for £35 (plus £35 for a transfer) and it's very simple to operate.

    https://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/aviva/

    https://www.aviva.co.uk/stakeholder-pension/

    Alex
    Last edited by Alexland; 17-11-2017 at 10:06 PM.
    • Malthusian
    • By Malthusian 20th Nov 17, 10:19 AM
    • 3,316 Posts
    • 5,057 Thanks
    Malthusian
    Malthusian . I currently pay a fixed 4.5% into my company pension whilst they make it up to 16% . There is no option to add further . There are two options for ongoing advice . 1% is for all the advice elements plus an annual review . 0.75% all the advice elements less the annual review , thanks .
    Originally posted by shilts
    Usually the ongoing fee would be on the expensive side, but given the small size of the pot and the ongoing contributions you would be hard pressed to find cheaper. Advisers charging 0.5% ongoing would probably tell you that your fund and contributions are too small for them to advise on.

    If you feel the assurance of having your pension monitored and reviewed is worth 0.75% - 1% then it's your money; otherwise I would agree with DunstonH's suggestion of asking for transactional advice, i.e a one-off fee to review the personal pension and the investments.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

189Posts Today

2,087Users online

Martin's Twitter