What do I look for in a Financial Advisor?

Horasio

My husband has just reached 60 and none of his pensions have performed well much like others his age.

We got letters saying we could withdraw some lump sums out. We would need to invest the rest.

He has suddenly lost his life insurance which they cancelled. Can they do this without informing us? There was nothing in the letters stating this.

None of the post we got stated any urgency to act before his 60th birthday.

We are totally clueless about pensions and life assurance. the terminology is double Dutch to us.

I guess the advice will be to find a financial advisor.

We employ an accountant and use solicitors when we buy and sell houses but when it comes to using a financial advisor, we don't know where to start.

dunstonh

My husband has just reached 60 and none of his pensions have performed well much like others his age.

Depends on your definition of well. Despite the last decade being poor for investment returns, it has still been pretty easy to beat cash over the long term and even the bog standard balanced managed fund (which is where most non-serviced pensions are invested) has beaten cash savings rates. Returns have not been at a level of previous decades but they have still been positive.

We got letters saying we could withdraw some lump sums out. We would need to invest the rest.

They doesnt sound right unless you are looking an the unsecured income option rather than the secured income option.

He has suddenly lost his life insurance which they cancelled. Can they do this without informing us? There was nothing in the letters stating this.

Did they cancel or did they expire? Providers dont just cancel life assurance plans (unless you stop paying). More likely he hit the termination date for the plans.

None of the post we got stated any urgency to act before his 60th birthday.

There is no urgency. A selected retirement age on a pension is just for illustration purposes and to act as a prompt. The average retirement age is 63. So, he is less than that. He doesnt have to take the pension now. He can defer it, transfer it or take it. He has until age 75 to do something. With a 15 year timescale to decide, urgency is not an issue.

I guess the advice will be to find a financial advisor.

We employ an accountant and use solicitors when we buy and sell houses but when it comes to using a financial advisor, we don't know where to start.

Make sure its an IFA and not an FA. https://www.unbiased.co.uk is the main database for IFAs in the country (something like 99% of IFAs are on there). IFAs handle over three quarters of pension transactions. So, it shouldnt be hard to find one locally to deal with.

Horasio

He rang to arrange the lump sum withdrawal and they informed us about the Life Assurance being cancelled. We have been paying as normal and didn't cancel it. It was not mentioned as expiring in the original paperwork

They said they MIGHT reinstate it if we reactivate it by February.

Seriously, our pension is peanuts - so opting for an older retirement age

I don't know if the lump sum is unsecured or secured

dunstonh

He rang to arrange the lump sum withdrawal and they informed us about the Life Assurance being cancelled. We have been paying as normal and didn't cancel it. It was not mentioned as expiring in the original paperwork

It isnt lump sum withdrawal. It is commencing the pension. Even if you take zero income it commences the pension and the consequences, such as lower death benefits, that go with that.

If the life assurance was a pension term assurance then these can be linked directly to the existence of the pension and payment of regular contributions. If you commence the pension it effectively ceases to exist. There is often a period where you can reinstate if you make up the missing payments. Some may transfer a pension term assurance to level term assurance without new underwriting. It varies with companies.

I don't know if the lump sum is unsecured or secured

The existing provider will only tell you about options that have. Not all the options available. Some dont even make you aware of all of their own options but rely on you or your adviser to tell them what you want. Secured income is annuity purchase. Unsecured income covers a range of alternative options.