Seeing an IFA: Costs?

pboae

I'm not sure if this is the right place to put this, but I couldn't find anywhere that looked more appropriate. Mine and OH's pensions are a mess, I don't have one, he has about 6. He is definitely contributing to at least 3 and has employers contributing to 3 (1 of which is one that he is not contributing to). At least 1 of them is rubbish, 1 is a good personal pension and one is a super ann. At various times he has been contracted in, and contracted out, and has just contracted back in again. Plus, because he has so many part time jobs his tax situation is pretty complicated as well.

I used to work in pensions, so I was hoping I could get to grips with it myself, but I think we need some professional advice to get things in order. I really don't want them to sell him yet another pension, and I already know which one I want, so it's more a question of what would be the most tax efficient way for us to invest, and which scheme he should concentrate on.

I've had an IFA who specialises in pensions recommended to me, but because of the above I want to negotiate an hourly rate rather than commission. I've never even seen an FA before (other than going through the motions for mortgages) and I'm not really sure how it works. Will they have a set hourly rate? Is it acceptable to try and haggle over that rate? If I do, will they just drag the work out to make the money back in 'extra' hours? Will there be set fees for certain procedures? Will they give me an estimate of how long it will take (and therefore how much it will cost)? How can I judge if it's a fair price? Sorry for all the questions, but I don't want to get ripped off!

dunstonh

Will they have a set hourly rate?

Most will

Is it acceptable to try and haggle over that rate?

You can try.

If I do, will they just drag the work out to make the money back in 'extra' hours?

6 pensions to review means six letters going out, 6 batches of paperwork coming back and 6 pensions to review and then report on. Thats quite time consuming. Most decent IFAs have software which puts start and stop times into each event taken so you can see how long has been taken at each stage. If they cannot do this, then you shouldnt use them.

Will they give me an estimate of how long it will take (and therefore how much it will cost)?

You can ask for one. The first meeting (hour) is usually free and after allows the IFA to ascertain what level of work is required.

How can I judge if it's a fair price?

£100-£150 per hour is the average rate. If you are not purchasing a financial services product then the then VAT is also added. If you do purchase a financial services product then VAT is not applicable.

pboae

Thanks very much, that's really helpful.

I know it's complicated so I'm prepared for a fairly hefty bill, but I just wanted to know a bit more about it first. Hopefully it will be money well spent in the long run.

dunstonh

You can set a ceiling on costs. You could also enquire about a fixed cost transaction as well.

EdInvestor

He...has employers contributing to 3 (1 of which is one that he is not contributing to).

Sounds to me he's got an excellent grip on the situation.:D

pboae

Hmm...if he even knew the names of the pension companies maybe I'd be convinced ;-)