Independent Financial Advisors & Pensions

Nine_Lives

So...i'm grateful for all the advice given in the other thread of mine, but i think i'd be more comfortable seeing an IFA as well as.

I've read these usually/do, take commision etc & have just read the re-pensioning URL.
Anyway, one i was wondering is when you go see an IFA, are you then expected to take out a Pension with/through them?

I do things like this all the time. Take for example i went for gait analysis (where they check your walk/run with cameras on a treadmill for those who don't know). Anyway, that's what i went for, it was free, i had it, tried a few shoes on, said my thanks & left & picked up my shoes elsewhere for cheaper. My gf said that wasn't "right" as i should really buy the shoes through them for the service they've provided.


Just wondered what it's like with the IFAs. I'd only be going for ADVICE, nothing more, nothing less. I would intend to walk out of there without having made a definite decision.

Or are you pressured/expected to make a decision with/through them?

jem16

K_P83 wrote: »

Just wondered what it's like with the IFAs. I'd only be going for ADVICE, nothing more, nothing less. I would intend to walk out of there without having made a definite decision.

That's fine. However you will need to pay a fee for that advice.

dunstonh

've read these usually/do, take commision etc & have just read the re-pensioning URL.

Most actually take fees. However, they are usually paid via the product. Although you can pay by cheque if you want.

Anyway, one i was wondering is when you go see an IFA, are you then expected to take out a Pension with/through them?

no. You are buying advice. not a pension. The advice is what costs you.

Obviously, if you need a pension, you would be daft to pay for advice and then buy it elsewhere as the other distribution channel will then charge you more for than had you used the IFA.

Nine_Lives

Cheers guys.

I'm well aware that i'll have to pay for the advice, i don't mind this at all (don't have a choice, but still...)

dunstonh - you say it'll cost more to get advice & then go elsewhere. Would it be ok (as in cost no extra than it would if i decided on the spot) to go to an IFA & then follow through with their advice with them at a later date (obviously not too later, we'd be talking a few days or a couple weeks perhaps)?

What sort of range should i expect for what an IFA would charge? I know it'll vary from place to place, perhaps region to region, which is why i ask for some sort of range if at all possible.

dunstonh

dunstonh - you say it'll cost more to get advice & then go elsewhere. Would it be ok (as in cost no extra than it would if i decided on the spot) to go to an IFA & then follow through with their advice with them at a later date (obviously not too later, we'd be talking a few days or a couple weeks perhaps)?

You are normally expected to read the report and understand it before you decide to proceed (or not). So, a short period is normal. It would only really be an issue if the research went of date because of a long gap.

Also, remember that if the fee is collected via the pension, you get tax relief on the fee. So, you dont want to be in a position where you are having to pay by cheque because you want a too long a delay.

What sort of range should i expect for what an IFA would charge? I know it'll vary from place to place, perhaps region to region, which is why i ask for some sort of range if at all possible.

All those things will impact. City location vs rural. Firms that focus on high net worth will price themselves attractive to high net worth but massively high for low net worth etc. A servicing firm may price well on servicing but not on transactional (or vice versa). Some will be greedy, others cheap. Value for money will usually fall between the two. if you are looking at transactional and starting from a nil balance with just a regular contribution then there isnt much work so around £500-£750.

Nine_Lives

Hell fire I was expecting something like £20/hr with the meeting taking perhaps 2 or 3 hours max in total. £500??

Also, after reading the re-pensioning thing, i thought it would be a good idea to pay up front all your dues to the IFA & to NOT have it dragging out over time where they keep getting paid off from you?

I'm confused before i've even begun lol.

jem16

K_P83 wrote: »

Hell fire I was expecting something like £20/hr

When was the last time you got work done?

Plumbers charge £30ph and electricians charge £40ph. IFAs more in the region of £100-£150ph depending on who you see and where.

with the meeting taking perhaps 2 or 3 hours max in total. £500??

Your actual meeting would probably take far less than that. However the IFA then has to do research and write a report - it's going to take a little more than a couple of hours.

£500 for advice is actually quite good although as Dunstonh said that's tramsactional advice - no ongoing advice.

Also, after reading the re-pensioning thing, i thought it would be a good idea to pay up front all your dues to the IFA & to NOT have it dragging out over time where they keep getting paid off from you?

That depends on what you want from the IFA. Do you just want him/her to set up your pension and then simply forget it about it for 40 years? That's a recipe for disaster right away.

You really need to keep investments under review. A servicing IFA will review it annually but obviously this is going to cost more.

Nine_Lives

To answer - never. I never have to deal with plumbers, sparkies or any of that as i'm still at home. Closest i come to having to pay for anything is with the car. Our mechanic charges us about £10/£20 an hour. Had to take mine elsewhere recently who charged £44/hr which was a bit of a shock.

This should maybe paint a clearer picture for the members of MSE about where i'm coming from. When i say i have NO CLUE about pensions, i really do mean i have NO CLUE!! Quite literally.

I can't honestly see that most people will see an IFA & have a spare £500 to spend. What do most people seem to do? What do/did YOU do?




I've spoken to my employer about pensions. They don't do the thing where they pay x-amount in. In fact, whatever system they had is so outdated that one of the 2 companies they were in touch with no longer exists. They told me that they can put me in touch with some stakeholder pension who will advise on behalf of my company (watch them pocket some money out of all this - they're right swindlers!!) but it'll take them a few week or so to get all the paperwork together.
No idea if that would be any good.


I take from your post that it is beneficial to pay [a fee] to have the pension continuously monitored then.

JoeCrystal

What did I do? In spite of having low income (roughly £14,000), I paid a visit to an IFA and had a hour meeting going over the details and risk assessment and making sure that I do not have a company pension that employer do contribute into. My employer does have a stakeholder pension scheme but no one in the entire company is member of it and of course, the employer make no contribution at all.

My IFA set me up with Scottish Widows Personal Pension and recommended which funds and which percentage to pay into. I paid in a lump sum and continues contributing into it ever since less than a year ago. The fee was £300 and the commission is 1% (Their reason for it was to cover the costs of maintaining my file and meeting any ongoing regulatory requirements). It was only a transactional advice but I can get another transactional advice if I need to.

What I am trying to say is there is nothing you can lose by booking appointment with your local IFA or two. Here is a link to unbiased website which will help you in your search. http://www.unbiased.co.uk/

jem16

K_P83 wrote: »

I can't honestly see that most people will see an IFA & have a spare £500 to spend. What do most people seem to do? What do/did YOU do?

I would say that the majority of people probably agree their fee and pay for it via the product itself - that's what I did.

They told me that they can put me in touch with some stakeholder pension who will advise on behalf of my company (watch them pocket some money out of all this - they're right swindlers!!) but it'll take them a few week or so to get all the paperwork together.
No idea if that would be any good.

I expect you can see but I would be a bit worried about who they were actually working for - you or the company.

I take from your post that it is beneficial to pay [a fee] to have the pension continuously monitored then.

In the beginning, it's probably not going to be necessary. Once it gets to around £20k it's best to monitor it.

JoeCrystal wrote: »

The fee was £300 and the commission is 1%

Can you explain what you mean by commission is 1%?

JoeCrystal

jem16 wrote: »

Can you explain what you mean by commission is 1%?

As I understand it, the annual commission is set at 1% of the total annual premium. Basically, if I paid £1,000 (regularly) in first year, it will be commission of £10. It is not charged on single payments to pension scheme, just regular payments I believe. Will have to double check on that.

Joe