Do You Need Financial Advice? When To Get It, When Not To Get It Discussion Area

MRP37

Hello

I am debating whether I need to see an IFA. I am 31 and currently earn around £62.5K per year. I have around £30k in savings. I have been to see a financial advisor in a bank and he advised me to utilise my full ISA allowance via a stocks and shares ISA, and also obtain income protection insurance. I understand that the products he can recommend are limited and so want to ensure I am getting the best deal for me. I know a moderate amount about ISAs but not income protection insurance. Do you think the cost of engaging an IFA is worthwhile for me?

Any comments appreciated.

Thanks
MRP37

fultime

Read the financial advice notes but it dosn't mention getting advice on a lump sum saving? I have had £90000 for the past 3 years and I keep having to move it from one account to another to get the best interest which is poor anyway is there a better option for a lump sum like this with the best interest rate and no risk of losing my lump sum? I can tie it up but don't really want to just in case I did need it for something although I've not for the past 3 years. If anyone can advise me I would really appreciate it, my husband and I are 60 now and could do with a little extra money to help us out but don't want to use the lump sum if we can avoid it just yet as we could live till our 80's or more so it wouldn't last us long if we start spending it now. Thanks in advance for any advice folks!

lisyloo

is there a better option for a lump sum like this with the best interest rate and no risk of losing my lump sum?

If you want absolultely no capital risk then there aren't a huge array of options.
You could look at something RPI linked but that's a gamble on the return.
You could also look at something like a GEB (guaranteed equity bond) which is an investment where the return is based on stock market(s) but guarantees your capital. Many of the products offered on the high st are poor value.

I can tie it up but don't really want to

That's going to limit your options.
If you want instant access and no capital risk then I think you pretty much are stuck with ordinary savings accounts.
Could you not tie up some of the money? and then keep some with instant access.

Your options will be limited if you aren't willing to take any capital risk and further limited it you want instant access.
Increasing returns tend to come with risk and also tieing the money up.

lisyloo

but don't want to use the lump sum if we can avoid it just yet as we could live till our 80's or more

Do you own your own home?
Could you consider equity release in later life? meaning some of your cash mnow would be freed up?

jem16

fultime wrote: »

Read the financial advice notes but it dosn't mention getting advice on a lump sum saving? I have had £90000 for the past 3 years and I keep having to move it from one account to another to get the best interest which is poor anyway is there a better option for a lump sum like this with the best interest rate and no risk of losing my lump sum?

At the moment you are swapping one risk, ie investment risk, for shortfall risk as your capital is probably not keeping up with inflation.

There are some structured products that are better than the usual offering from banks but are usually only available through an IFA. These offer varying degrees of capital security.

I can tie it up but don't really want to just in case I did need it for something although I've not for the past 3 years.

Does it all have to be instant access or can some of it be tied up?

If anyone can advise me I would really appreciate it, my husband and I are 60 now and could do with a little extra money to help us out but don't want to use the lump sum if we can avoid it just yet as we could live till our 80's or more so it wouldn't last us long if we start spending it now. Thanks in advance for any advice folks!

I would think what most IFAs would try to do in this situation, is to put together a portfolio that would allow some capital growth and pay out a natural income from the investment funds. However you may need to rethink the no-risk, no tie up conditions.

A talk with a few IFAs might be in order but make sure it is an IFA and not an FA from a bank. If you have no personal recommendation then use https://www.unbiased.co.uk to find an IFA in your local area.

fultime

Thanks all I think we probably need to tie it up then and also to see an IFA as suggested, so thanks again

Kind regards

Karen

JaneBloggs

I want to transfer my pension from my previous employer to my new pension scheme at my new employer. The reason for this is that as I only stayed with the previous company for one year, I have to take the money as a lump sum minus the employers contribution, or transfer it into a new pension pot and keep the employers contribution. The employers contribution is about 1/3 of the full amount.

The new pension company says they can only accept the transfer if I talk to an IFA and the IFA talks to the pension company. Why? It's my money and I want to make the transfer, so why do I have to pay for an IFA to get involved?

jem16

JaneBloggs wrote: »

The new pension company says they can only accept the transfer if I talk to an IFA and the IFA talks to the pension company.

Is your previous pension a final salary pension? If so that is why an IFA is required to sign it off as it's seen as a high risk transaction. In your case it isn't as you have no choice but to transfer it.

If it's not a final salary pension, then there is no need for an IFA although some companies may still advise you to use one but you should be able to find a company that will accept it without an IFA.

Why? It's my money and I want to make the transfer, so why do I have to pay for an IFA to get involved?

Unfortunately it's regulations.

dunstonh

Jem covers one of the reasons. The other may apply if it is a group personal pension and there is a scheme IFA. The employer effectively employs the IFA to do the administration.

Silverbird

Hi everybody

I am posting on behalf of my Dad who has just sold his late mother's house today.

With the proceeds he is going to pay off his mortgage and sell the mortgage protection policy. He says it should be worth £12,000 and was there to pay for any shortfall in paying off the mortgage when it ends in about 3 or 4 years.

My Dad says that when he asked for the surrender value of the mortgage protection a few months ago a guy told him it might be a good idea to contact a Financial Advisor to see if he could sell it on the open market.

Now I don't have a clue about any of this at all (never had a mortgage) and my Dad's not very clued up either. Is this advice correct? Would it be a Financial Advisor he would need to seek advice from?

I do hope somebody can help. Please let me know if there's somewhere more suitable I could post.

With very kind thanks in advance.