Role of IFAs in pensions

Layo909

I've recently seen an IFA about a pension. I expected that he would quickly assess my circumstances, and them recommend a pension based on this. I expected that as I would be paying the IFA large sums of money, I would sidestep having to learn about the workings of a pension, and also he would be to blame if it went wrong. However it seems that he needs me to learn all the ins and outs of pensions before offering me anything....which then begs the question, why not just sort out my pension myself?

Any thoughts?

Iancfp

You went to the wrong IFA

If an adviser has been dealing with pensions day in day out for decades and has examinations based on pensions then they are bound to know more than an amateur

Go elsewhere but check that you are going to a pensions expert

dunstonh

However it seems that he needs me to learn all the ins and outs of pensions before offering me anything....which then begs the question, why not just sort out my pension myself?

I disagree with Ian on this regarding the point about going to the wrong IFA. We dont have enough info to judge and we dont know what you mean by learning all the ins and outs.

There is no one pension scheme that fits all people. You get basic plans and advanced plans. Some pretty rubbish plans and some very good ones. The adviser has a responsibility to make sure that you have the best plan that fits your knowledge and understanding. So, the adviser has to gauge your knowledge and understanding.

You have said that you dont want to learn about pensions and you want someone to blame if it went wrong. So, in that case, the adviser should really avoid all the decent plans and more advanced options and stick you in a basic option, probably a stakeholder pension as you can do little wrong with that and is designed for people that dont want the best but want simple.

If the adviser recommended a plan that you dont understand (not the full works but what it does and how it is invested) and you later complained, the adviser wouldnt have a leg to stand on if the advice was too complicated for you to understand.

Communication is important. If you want a simple option then tell the adviser. He can then adjust the advice to suit you. If he doenst know you want a simple option and is looking at what he feels is best but more detailed, then you will not be getting what you want and he wont know that.

Iancfp

I think I am right to say he was at the wrong adviser because it was a mis match between what client wanted and what IFA delivered (I agree with you that actually client education is generally something IFAs should do). Something obviously went wrong in the communication process

Loughton_Monkey

Layo909 wrote: »

I've recently seen an IFA about a pension. I expected that he would quickly assess my circumstances, and them recommend a pension based on this. I expected that as I would be paying the IFA large sums of money, I would sidestep having to learn about the workings of a pension, and also he would be to blame if it went wrong. However it seems that he needs me to learn all the ins and outs of pensions before offering me anything....which then begs the question, why not just sort out my pension myself?

Any thoughts?

Imagine you went to a surveyor for a full structural report on the house you were just buying for £500,000.

You may expect a 50 page report. On page 17 it might say there is evidence of 'bark beetle' in the roof joists, some 'repointing' necessary to the elevation on the right hand side, and that the fuse box is legal, but doesn't comply with IEEE rule XYZZ paragraph 3 for new installations.

From the tone of your post, you seem to want simply to buy the house, and then 'blame' the surveyor if your roof falls in, your wall gets damp, or if your electrics blow up!

You must remember that an IFA's professional requirements force him to make sure you understand what you have bought and that he has explained the risks and terms adequately....

What you seem to be describing is the old 'Execution Only' system in which you could simply go to an IFA and sign to say you want a pension. But that signiture meant that you could not, in effect, sue hi for mis-selling.

attila_

This is an interestin thread as I am planning to visit an IFA very soon. I have read about the basics on pensions but would ideally like an expert to guide me and help me choose the right plan.

I've been on unbiased.co.uk and chosen a few. But what qualifications should I be looking for to know its their bread and butter?

dunstonh

But what qualifications should I be looking for to know its their bread and butter?

Qualifications are a bit messy when searching on unbiased because there are now so many exam boards and versions. if you selected one version it would only show IFAs with that version and not all the ones with an equal qualification but a different exam version/board.

If you are just looking at retirement provision then you dont need any specialist qualifications as an IFA should be able to do it in their sleep. Specialist qualifications are more suited to the niche or more specialist areas. Many IFA firms have arrangements in place to refer to specialists if you happen to need them.

From the tone of your post, you seem to want simply to buy the house, and then 'blame' the surveyor if your roof falls in, your wall gets damp, or if your electrics blow up!

That is what concerned me too and i wonder if the IFA in question has picked that up and is going a bit over the top to cover his backside.

All the OP has to do is complain he wasnt told this or that (and how many times have we seen those accusations made on this board) and if the adviser cant prove the OP knew enough to understand the advice given then then its an upheld complaint waiting to happen.

Iancfp

There are a few Pensions specific advanced qualifications provided by different bodies CII IFS etc. Unbiased will let you search by these and you can check when you make appointment (unbiased refers to the practice not the individual)

Of course having the exam does not definately make someone an expert and not having doesnt but if someone knows pensions why have then not gone at proved it by exam. Certain advice like a transfer from an occupational scheme requires an adviser to have such a qualification.

As this post may show the question of style may also come in so talking to a couple of different advser - even just over the phone may help

thehorologist

From my limited experience of 2 IFA's, they are a bit like Racing tipsters, pay them for a good bet and they will expect you to research the form and blame you for your lack of research if if their favourite turns out to be a donkey.

Layo909

Loughton_Monkey wrote: »

You must remember that an IFA's professional requirements force him to make sure you understand what you have bought and that he has explained the risks and terms adequately....

What you seem to be describing is the old 'Execution Only' system in which you could simply go to an IFA and sign to say you want a pension. But that signiture meant that you could not, in effect, sue hi for mis-selling.

I went to see the bank about a mortgage on the weekend. To work out the house price we could afford, they took details such as salary, age, credit check, any loans, any children etc etc. Then within minutes gave us the max house price we could afford.

I thought an IFA would do the same, assess my circumstances, then come back to me with the ideal pension which he chose using his expertise. However, this doesn't seem to be how it works, so I'm now seriously considering side stepping the IFA altogether.

Andy_L

Layo909 wrote: »

I went to see the bank about a mortgage on the weekend. To work out the house price we could afford, they took details such as salary, age, credit check, any loans, any children etc etc. Then within minutes gave us the max house price we could afford.

I thought an IFA would do the same, assess my circumstances, then come back to me with the ideal pension which he chose using his expertise. However, this doesn't seem to be how it works, so I'm now seriously considering side stepping the IFA altogether.

Mortgages are simple compared to pensions.

A pension has to consider imponderables such as your attitude to risk and look into the future and consider variables such as salary rises, inflation, longevity, spouse/kids all of which require more time & effort than a mortgage