Retirement options - Advice sought

kt

We will be lucky enough to gain £300k cash in the near future. My husband is 58 and does not want to touch his pension until he is 65yrs. He is desperately unhappy in his present job and would love to retire. What would we need to do with this money to give us sufficient income to take us to his 65th birthday. Our mortgage is all but paid for. We were thinking about buy to let but reading recent threads it does not seem to be a very good idea. We would love to give some money to our children to get them on the housing ladder. We are very muddled at present and would love some advice. We have previously used Chase de Vere for independant advice - would this be the way forward.

freebo_2

I would definately take independent financial advice from a reputable source to ensure you are fully utilising your personal tax allowances, and to use tax free and tax efficient investments.

dunstonh

You tend to find the large firms are very expensive when giving advice. Your amount doesnt justify a specialist firm and you would almost certainly get better value from a local investment specialist IFA.

kt

dunstonh wrote:

You tend to find the large firms are very expensive when giving advice. Your amount doesnt justify a specialist firm and you would almost certainly get better value from a local investment specialist IFA.

Thanks for your advice dunstonh. I am very ignorant, I thought that the advice I got through C de V was free. Do they "bump up" commission rates to justify their advice?
How would I find a good local investment specialist IFA - is there a governing body that I can ask?

dunstonh

Thanks for your advice dunstonh. I am very ignorant, I thought that the advice I got through C de V was free. Do they "bump up" commission rates to justify their advice?

You have the choice of paying for advice either through commission or fees. Commission may appear free to you but the charges on the plans will be higher than on fee basis. Many IFAs (more so owners, partners, directors) will discount some of the commission to improve the terms and there is also a business model called "new model adviser" which heavily discounts initial commission. Larger firms with employee advisers or "attached" self employed advisers do not often give discounts because their business model doesnt allow it. For example, one large IFA firm in this region only pays it's advisers 30% of the commission they earn. So, that IFA hasnt got much scope to discount when he/she is already losing 70% of the commission to the employer.

How would I find a good local investment specialist IFA - is there a governing body that I can ask?

All IFAs are regulated by the FSA. All IFAs are authorised to discuss and recommend on investments. Your investment isnt large enough to require a specialist as such but you are always better off seeing an adviser that focuses on that area. As such, you dont really want to be seeing an IFA who transacts 90% of their business in mortgages. You want to see an IFA that transacts mostly in investments. That you wont know unless you ask questions to the IFA you speak to.

There is a UK database of IFAs at https://www.unbiased.co.uk . You can postcode search but do not filter any qualifications as that is highly flawed and over filters often only giving one reponse around 100 miles away! Over the years there have been different qualifications and the filter will only show those that have that filtered qualification and not any of those that have the equivelent. So, do a search by postcode and see who comes up. You should get at least 5 firms (look at the telephone numbers and try to avoid 0870 or national numbers as these are often salesforces). Then phone them up and ask to speak with one.

Modern investment techniques involve asset allocation and multiple investment funds and products. A good quality investment IFA will be heading down that route. If you get a recommendation of a product which has 1-3 funds (with £300k you should be looking at least 20), then that is the old fashioned approach which has largely failed.

You should also enquire about ongoing servicing. With £300k, you want an adviser that is going to be with you and give periodic updates on ongoing advice. Not one that vanishes after they have set it up.

kt

Thanks for that. I guess I will look on the website you suggest and take it from there.