Basic help needed for complete novice

boybeck

Hi!

I need some advice on pensions and have been told to find an Independent Financial Advisor. Basically I have no idea how they work and what all the different types are.

Do you have to pay for IFAs. Will they be trying to flog me something?

I just need some advice and explanation about an existing pension. I'm 30 but I don't want to get to retirement age to find out it's not worth anything or was completely wrong for me.

Sorry if I sound a dunce, but I thought I'd start my "education" here.

Jason.

dunstonh

Basically I have no idea how they work and what all the different types are.

There are different types of IFAs but the principle is the same. They do not work for an insurance company or provider and have the ability to discuss, review and recommend from the whole market place.

How the IFA works is one of the biggest differences. A large salesforce will work a lot differently to a small local IFA. The salesforce will likely have targets to achieve to keep their job or pay level. The local IFA, particulary a well established one, has no such problems so there is likely to be less presure on a sale. (always exceptions of course).

Do you have to pay for IFAs. Will they be trying to flog me something?

You get the choice to pay the IFA by fees or let them earn by commission or perhaps a hybrid of the two. ie. agree a commission level of x amount and any commission above that gets rebated into the plan or reduces charges. Any below that amount you pay the difference.

I just need some advice and explanation about an existing pension. I'm 30 but I don't want to get to retirement age to find out it's not worth anything or was completely wrong for me.

I have just come out of a call not to different. I got a phone call from someone who used IFA Promotions (https://www.unbiased.co.uk) which is the database of all IFAs in the UK. He had his free consultation voucher (make sure you get yours). In his case, we agreed fee structure for ongoing advice and it will be on the hybrid version where we agreed commission but to a fixed level.

You will be in control of the remuneration. It is a requirement that the fee options are disclosed at the start of the appointment so you say how you want it done. I.e. first appointment free. If ongoing advice is needed, then take it on commission from the provider up to X%. The initial documentation actually shows you maximum commissions and average commissions. You decide.