Should I have an annual review with my IFA?

peterg1965

I started a 2nd Pension (AVIVA PPP) two years ago following advice from an IFA. This is part of a portfolio of investments and occupational pensions which will pay off my mortgage on retirement and give my the income that I desire when I finish work. There is a lot riding on this and I currently invest £14000 (gross) into the AVIVA pension. I have had virtually no contact with the IFA since the pension inception in Dec 07 except for the exchange of a couple of emails, and certainly no formal annual review of the investment risk strategy and fund spread. The commission earned by the IFA was significant (in my eyes) although I am not sure if there is trail commission in addition to the single amount stated in the PPP documents.

My question is, should I be insisting on, or asking for, a formal annual review?

I am generally content with the investment performance, through what has been turbulent times (my investment fund has actually grown slightly which fully vindicates the fund spread chosen by the IFA), but am inclined to increase exposure to more riskier investments as the world economies emerge from global recession. - I have 11 years until retirement at 55.

dunstonh

The commission earned by the IFA was significant (in my eyes) although I am not sure if there is trail commission in addition to the single amount stated in the PPP documents.

It would state it if there is but usually the Aviva PPP from that time had no trail.

My question is, should I be insisting on, or asking for, a formal annual review?

Did you employ and pay the IFA on a servicing basis or transactional basis?

peterg1965

dunstonh wrote: »

Did you employ and pay the IFA on a servicing basis or transactional basis?

I am uncertain. I have the paperwork which she presented to me at the time which contained her recommendations and the financial illustrations - she also arranged life and critical illness cover for my wife and myself - but it does not state whether the advice was on a transactional or ongoing servicing basis. I assumed, in good faith, the latter but I don't think I asked at the time.

Maybe I should send her an email to ask.

dunstonh

but it does not state whether the advice was on a transactional or ongoing servicing basis.

Servicing costs. So, unless you have some method of payment agreed to cover it then you wont get it on a frequent basis. You tend to know if you have servicing or not.

Maybe I should send her an email to ask.

yes. best way.

peterg1965

I asked my IFA what basis she arranged my PPP, her answer was transactional. She has said that she is happy to meet for a review on a no fee basis but that if anything required to be changed then we could discuss fees.

I am a little disappointed that I didn't ascertain at the outset whether annual ongoing servicing of my PPP was part of the 'deal'. Maybe that was a little bit of naiveity on my part.

I have to say now that I have ascertained that she has no particular alleigance or loyalty to me having given her initial (very sound) advice and recommendations, I am part tempted to transfer the PPP to a SIPP, provided I can justify the higher charges and will utilise the unique attributes of the SIPP.

ozzage

peterg1965 wrote: »

I have to say now that I have ascertained that she has no particular alleigance or loyalty to me having given her initial (very sound) advice and recommendations, I am part tempted to transfer the PPP to a SIPP, provided I can justify the higher charges and will utilise the unique attributes of the SIPP.

Sounds reasonable given it was just on a fee basis. Now you just need to consider whether on-going advice is worth paying for!

peterg1965

ozzage wrote: »

Sounds reasonable given it was just on a fee basis. Now you just need to consider whether on-going advice is worth paying for!

To be honest, her initial fund choice seems to have been very sound. Despite the huge financial turmoil of the past two years, the funds have just about held their own. I have paid in about £47K (Gross) which included a transfer in of an old PR SERPS Pension (£17K) and my monthly contributions, the fund value now stands at £48K (the beauty of online access to my AVIVA PPP!). However, I want to start seeing some real growth in the next couple of years - I may get it from sticking with the current medium risk fund spread (6 different AVIVA funds). However, I want to consider a slightly more aggressive (and riskier) fund spread, potentially including some FTSE100 shares if I went the SIPP route, as the world economies begin to get going again. There is a lot at stake though and no hasty decsions!

I will probably take het up on her offer of a 'free' review and see where we go from there.