Must I use an IFA?

eenymeenyminymo

On advice from my IFA, I have a £110K pension pot currently with a LV= drawdown plan. It has been there for a 18 months but I haven't yet taken any income. This isn't my only pension, I have a couple of other small pensions from company final salary schemes plus a slightly enhanced state pension.
My problem is that I don't think that I have benefited tremendously from engaging an IFA and certainly when I have made investment decisions, I have had extremely vague advice from my IFA and no performance feedback. Not only that but any growth has been eaten away by commission. I am beginning to wonder whether I will ever see any benefits and I am beginning to think about buying an annuity. The one thing stopping me is that once I make that decision I will be left without any options.
I would really like to have a direct relationship with LV= but they only offer their drawdown product through IFAs. I want to be much more hands-on and I want to know how each of my little 'investments' is performing.
Does anyone know of an insurance company which will talk directly to punters?
Thank you for reading this, hope you can help.

dunstonh

Not only that but any growth has been eaten away by commission.

Shouldnt be. Typically you suffer the usual retail annual management charges.

I am beginning to wonder whether I will ever see any benefits and I am beginning to think about buying an annuity.

One assumes that you knew that investments will go down as well as up and that until March this year we had 18 months of near continuous drops in all asset classes.

does anyone know of an insurance company which will talk directly to punters?

Why do you want to use an insurance company? If you are going to DIY then you would typically use a SIPP. Assuming you use investment funds then it will probably be more expensive but it will allow you to DIY. The commissions you are not happy with the IFA getting will be taken by the SIPP provider instead.

What makes you think that you could have done any better with investments when virtually everything dropped in value over the last 18 months?

Has the performance of your investments been below benchmark or above it?

eenymeenyminymo

Perhaps I wasn't clear enough? My main gripe isn't with the lack of growth but with the service I get from my IFA. On top of that, they are very expensive. That is why I was asking the question, "Must I use an IFA?"
I haven't said that I think that I could do better on the investments, but if I was offering a service for which I charged >£2k per annum, I would certainly do better on the client care side of things. I wouldn't expect my clients to make decisions about how to invest based on a couple of torn pages from a magazine article. And I would return phone calls and emails promptly.
So, this experience has made me pretty wary of IFAs in general. I feel as though I have been ripped off.
I will hold my hand up - no I didn't do my homework well enough to start with. I did a little bit of shopping around but I didn't really understand what I was getting myself into.
Now I am trying to become better informed but I wouldn't post a question on here If I had all of the answers.
I see that you are an IFA. Perhaps you can tell me what sort of service I should expect? I realise that I shouldn't judge all IFAs by my one experience. I thought that if I had a direct relationship with a provider, at least I would be able to keep my 'finger on the pulse'.
Thankfully I didn't take my IFAs advice to start moving my pension pot into different funds 18 months ago. It was all held on deposit for the first year, so it didn't lose any of its value. I invested 25% in various funds about 6 months ago but haven't done anything else since.

whiteflag_3

eenymeenyminymo wrote: »

I haven't said that I think that I could do better on the investments, but if I was offering a service for which I charged >£2k per annum, I would certainly do better on the client care side of things. I wouldn't expect my clients to make decisions about how to invest based on a couple of torn pages from a magazine article. And I would return phone calls and emails promptly.

Can you explain how you arrive at the £2k plus per annum

Is your Ifa charging you a retainer or does the money come by way of trail commission from LV?


I am an Independent Financial Adviser.

Anything posted on this forum is for discussion purposes only. It should not be considered financial advice. Different people have different needs and what is right for one person may be different for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser who can advise you after finding out more about your situation.

[Deleted User]

eenymeanie pm sent

whiteflag_3

kittie wrote: »

eenymeanie pm sent

For goodness sake grow up!

dunstonh

I cant see how you get >£2000 on a fund of £110k. If the IFA is taking trail then that is typically 0.5% p.a. Are you perhaps mixing up the annual management charge with commission?

So, this experience has made me pretty wary of IFAs in general. I feel as though I have been ripped off.

Dont ever get ill then. Your view on doctors after Harold Shipman must be dreadful.

I see that you are an IFA. Perhaps you can tell me what sort of service I should expect? I realise that I shouldn't judge all IFAs by my one experience. I thought that if I had a direct relationship with a provider, at least I would be able to keep my 'finger on the pulse'.

The service you get should be the one that you are paying for and agreed to. Did you buy a transactional service (e.g. just paid for initial advice and placement) or are you paying a retainer (either directly or indirectly) for ongoing servicing?

The term IFA doesnt really mean anything when it comes to business model and servicing. The agreement you have with the IFA should tell you what level of servicing you are paying for.

It should be noted that if you do DIY and use a SIPP from say HL or others, then they keep the trail commission and charge the full annual management charge but give no servicing for it. On the other hand if your adviser is not a servicing adviser you could employ and appoint a servicing adviser instead if that is the service you want.

[Deleted User]

I don`t pay ANY charges to the sipp provider, apart from £10 a year for a pension cheque and £150 as a one off to vest the pension

The only charges I have had were £50 to transfer each pension and normal stamp duty plus dealing charge capped at £30 max per buy or sell and some were only £20 with no stamp duty.

Not HL by the way, I use sippdeal

http://www.sippdeal.co.uk/charges.aspx

I

whiteflag_3

eenymeenyminymo wrote: »

Thank you for reading this, hope you can help.

well me and Dunstonh did try. Suppose we only wasted five to ten minutes of our life!

Cheers mate :rolleyes:


Kittie just because you manage your own SIPP and you think your good at it that doesnt give you the right to start hijacking threads. Its an open forum. If you had anything about you, you would post in public what you said in your pm.

eenymeenyminymo

Whiteflag,
I do appreciate yours and Dunstonh's responses to me. I didn't appreciate your rude and agressive private email however.
You need to realise that some of us are complete novices and unfamiliar with the jargon. Speaking for myself, I find this whole area a confusing minefield. It is not always possible to react immediately, late at night when tired. Until I have time to decode your responses and look at my files - you both asked a few questions - I can't provide any meaningful response.
You have no idea why I thanked Kittie so I don't see why you should throw your toys out of your pram because I thanked her. It didn't mean that I don't appreciate the time you have given up to me.

dunstonh

I don`t pay ANY charges to the sipp provider, apart from £10 a year for a pension cheque and £150 as a one off to vest the pension

Kittie, if you are using direct investments then that will be the case. However, if you use investment funds then it wont be. Since A day, over 90% of SIPPs set up have used investment funds. The OP hasnt stated what sort of investments they would use but a novice is more likely to use investment funds. Also, the OP has given hints of having a risk profile that should not be to be too heavy in shares. Gilts wont really be suitable for a large amount. So that means bonds/fixed interest comes into play and for most people, funds are the best way to do this. The OP has stated that the IFA is getting £2k a year in commission but that amount is not consistent with what you expect. An annual management charge maybe but not commission. If you use funds in a SIPP on DIY basis, the charges could be the same or higher. The SIPP provider keeps the natural trail instead of paying it to an IFA.

If the OP wants to DIY then that is their choice. However, to do it based on a misconception is not the way to do it.