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

dunstonh

Good job it isnt regulated as cashflow forecasts are inaccurate because there are so many variables.

In this day and age, you get sued when you arent spot on. I reckon it will rain tomorrow. It didnt. Oh dear, here come the claims companies now....

whoosh

Evening all,

I'm trying to help my mon-illiterate mother find a good IFA in Blackpool to help her invest a lump sum of just under £100k for income only. She's seen a few people already and received a smorgasbord of suggestions about which I've had some really useful feedback from forum members. I'm keen to help her find the right person (I live in London), but on meeting one or two of them on trips back home, I don't think she has seen very good people.

Can anyone on this forum give a general recommendation of an IFA based in the Blackpool or Fylde area (St Annes, Cleveleys etc)? Someone who knows what they're doing? The Yellow Pages trial-and-error method is pants.

If not, any idea where I might go, on-line or off? She has tried asking family friends but not had any good leads.

Cheers!

fredpipes

Hi
If I wanted to take out a mortgage or buy an ISA I could find a table of current rates and choose the best. When it comes to buying an annuity however, it seems I have to pay someone for 'advice'. I have a (smallish) pot to spend and looking at the calculators on the websites of the IFAs mentioned in Martin's article, all can do much better than the quote my pension company Standard Life has given me.

I naively thought that getting a quote from one of these IFAs would be like getting a quote from a plumber: I have a set sum to invest and want to get the highest possible annuity! But oh no, I have to commit to one of them, or pay fees (or let them take commision) not only to the one I choose, but to the ones I don't go with!

I am already annoyed that an IFA I spent 20 minutes with over 20 years ago has been earning commission ever since from a pretty random choice of pension provider (you should see his projections - pure fantasy as it turns out!) so I am not best pleased about having to part with more money to get the pittance an annuity wil provide! Any (free) advice out there?

fred

dunstonh

IFAs didnt exist 20 years ago. The term IFA came about in 1988 with polarisation (Clerical Medical take credit for inventing the term). Before then it was just unlicenced insurance brokers effectively.

Also, a pension from 20 years ago wouldnt pay trail commission so he wouldnt have earned anything from it after the sale unless there were ongoing contributions. In which case, it would have been around 0.5-1% of each contribution.

Inflation over the last 20 years has been quite significant so if you didnt increase your contributions in real terms to keep up with inflation, then you shouldnt expect to get the same size pot you were looking at back then.

I naively thought that getting a quote from one of these IFAs would be like getting a quote from a plumber: I have a set sum to invest and want to get the highest possible annuity! But oh no, I have to commit to one of them, or pay fees (or let them take commision) not only to the one I choose, but to the ones I don't go with!

Getting accurate annuity quotes comes at a cost. Unlike other product illustrations, you can only get real time annuity data if you pay for it. All these tables you see are based on snapshot data and assumptions and not sufficient to base a recommendation on. So, if you want to engage the services of an adviser on this front, I cannot blame them wanting to get a commitment from you when they are incurring costs.

I dont understand what you mean by paying the ones you dont go with as you dont.

Using your plumber example, it would be like asking a plumber to go out and buy the materials before you agree to the job.

Chrismaths

Look on the FSA website https://www.fsa.gov.uk/tables. Type in your details and you'll get a good idea of the best quote around. Then you can go forearmed to an IFA and do it on an "Execution only" basis - meaning you can negotiate with the IFA for a reduction in the commission s/he takes (as you have no legal comeback on him/he's given no advice). Commissions are around 1% of your pension pot (but some will get more if they do lots of business - at no extra cost to you). The bigger the pot, the more likely they are to negotiate (as it costs the same to set up in time terms irrespective of amount of money).

dunstonh

Do not rely on the FSA tables with annuities. I can tell you that if you get the top 5 from the tables, then get the top 5 real quotes, the order will be different and the amounts different.

Annuities data changes daily and the tables do not. Also, if you are going to go execution only will you need to tell the firm how you want the following (execution only prevents advice being given):
with or without proportion?
advance or in arrears?
level, 1%,2%,3%, LPI or RPI?
Single life, with 50% spouse, 66% spouse, 100% spouse?
no guarantee, 5 year guarantee, 10 year guarantee?
Will it be a smoker or non smoker annuity?
Will it be an ill health or clean health annuity (even high blood pressure or cholestoral can increase the payment)?
Will you want buy back on death?

The snapshot data used on tables just isnt reliable enough and buying an annuity is a once in a lifetime event. You cannot change it in the future. Once it is done, it is done for life. Get it wrong and you are stuffed.

DannyC77

Hi, apologies if this is not the right place to post this, I am a 30 yr old teacher with annual income of 30k, I have an unencumbered property worth £300k with an annual rental income of £13k, i also have £6k in cash isas with Abbey. I am looking into how i should invest this, and am a bit of a novice at this sort of thing, would it be worth me seeing an IFA to discuss options??

dunstonh

would it be worth me seeing an IFA to discuss options??

Depends on what options you want to discuss. Cash ISAs and buy to lets arent what you would see an IFA for. Unless you are looking to fund that capital gains tax bill on the buy to let property when you eventually sell up.

hazel_rabbit

I have decided to choose an IFA because I am able to make initial decisions for myself but paralised when it comes to making changes a couple of years down the line. Any advice?
Hazel Rabbit

silentotter

My husband and I would like to to invest between 2% - 5% into a solid well known rebutable business that is worth three million pounds or more, and makes consistent profit each month of £50,000 or more year on year.

This would seem to us better and perhaps less risky then buying shares and maybe could provide a better pension income for us in later years.

Martin can you please give me some guidance on this as to which companies would be best and how we would go about this? Any guidance glad of it.

Silentotter