pension advice via IFA

hinchy

Has anyone had experience of obtaining pension advice from an IFA ?
I have a closed fund private pension and am seeking advice on what to do with it.
Has your experience been:- good/unsatisfactory?
Which is the more cost effective/satisfactory:-fees or fees and commission?

dunstonh

Has anyone had experience of obtaining pension advice from an IFA ?

Has your experience been:- good/unsatisfactory?

Does that matter? I can't see how someone has had a good experience or a bad experience will impact on you. You are extremely unlikely to see the same IFA.

I did over 250 pension transfers last year and can tell you that its a relatively simple transaction for an IFA that deals regulary in that area. It can be a bit daunting for an IFA that doesnt transact that type of business often and some may not even transact in that area. It is time consuming and is a more expensive transaction for the IFA compared with many other transactions. It also carries a higher liability risk than standard business (which may impact on your next question a little).

Which is the more cost effective/satisfactory:-fees or fees and commission?

Depends on your time till retirement, the fund value and the insurance company you are currently with. Gross commission is around 4.5%. If you see a owner IFA/Partner IFA you may get some of that commission rebated. If you see an IFA employed by a firm, then it is unlikely as they have to share their commission and their cut can often be as low as 20-30% of the Net commission. A rough guide on hourly basis would be 6-8 hours and if you work on £75 -£100 an hour, that would be a fair price. Compare those two and decide.

If you have a long time until retirement, you could end up with a pension with an annual management charge of 0.4% if done by fees. Take that over the term of the pension and the lower charges may well offset those fees many times over.

Another option is to have the fee taken from the transfer value. This can result in charges around 0.6%p.a if done with the right provider

hinchy

Thanks dunstonh, you have given me some food for thought and look forward to meeting the advisor with a little more confidence.Will return with feedback, cheers.