What is my IFA doing for me

Neverland

Linton wrote: »

I think you have forgotten which ID you are posting under. Why not just use one like most other people?

No ...he called me a bigf....which is quite rude really

See #26

gadgetmind

atush wrote: »

I said I lost on pensions last year that were in equities, but OH has one that is mostly in gilts and bonds and that did really well.

My investments tend to be fairly carefully balanced and rebalanced, and I'm continuing to contribute to most pots.

I have a model that currently has last year's April figures in the first column and then uses a conservative 4.5% absolute year-on-year return running off into the future.

I am on track to have achieved this from April 2010 to April 2011, which is nice. OK, so the recent lift helps (a lot!) but so did some market timing and some dynamic rebalancing. The latter relied on each pot containing a mix of assets.

Nearly_Old

OK back to the original question:

sazz1006 wrote: »

Around that time, a local IFA came cold calling and I explained my situation. He helped me sort the 2 pensions and explained his fee would be taken from the commission from the company that we placed the frozen pension and pension share with. Fair enough. This time last year he rang to say he needed to update me and called with some fancy charts and then said he would take the 500.00 fee from the pension fund. I was a bit taken aback as naively I thought he'd had his commission but didn't say anything:o.

We're now a year on and he's made an appointment to 'review' my pension. I have also just had my forecast and the amount in the pot has dropped by 10,000 in value since last year.

So what I'd like to know is for a pension that is relatively small (around 4K when I retire in 9 years), and will never get any further payments, could I just carry on as before letting it look after itself or do I really need to knock 500.00 a year off the fund to pay for this advice?
Thank you

Over the last 20 years we've had 3 advisors - we realised after some years that the first one was not that good but didn't realise at first as we were first time investors. The 2nd one started out OK but again over the years the service was not that thorough or particularly targeted at our needs. If only hindsight came first life would be much easier.

We then took control ourselves with mixed results but luckily overall managed to keep the total ticking upwards. Early last year I was contemplating retirement later in the year so looked round for an IFA. My son is 2 years into his training as an IFA so I started by meeting the head of his firm - there are only 3 of them. Then I spoke to a couple of more local IFA's and provided them with a list of our current pension arrangements, details of our current savings and investments and the latest draft of our retirement budget. Each produced a short statement of their initial thoughts on the possible ways forward and we chose the one that we felt most comfortable with.

As you are 9 years away there is a strong argument that growth should still be the primary concern but the higher the potential rewards usually means the higher the risk. As you get nearer to retirement the focus may well change to protect what you have got; i.e. the fund does need to be periodically re-balanced. As others have said there are basically 2 choices 1) take control yourself; or 2) use an IFA.

Personally if you want to continue to use an IFA I'd look up a couple of others and ask them to meet you. I'd also recommend that you have all your details ready for them so they can start to ask any questions straight away. Then based on a) how you feel about dealing them; and b) the fee they quote chose which one to go with.

fairleads

Neverland wrote: »

fairleads wrote: »

Yeah we're not going to take an annuity until we have to

But I think the OP didn't want to take risks

Who said anything about annuities or taking risks? I've never contributed to a pension fund (beyond triviality commutation value that is) apart from the state pension. As to risk. One thing i have learned in life is not to place too much faith in advice from someone who stands to lose nothing if things go wrong.

Neverland

fairleads wrote: »

Neverland wrote: »

One thing i have learned in life is not to place too much faith in advice from someone who stands to lose nothing if things go wrong.

Almost anyone who you can get advice from will have nothing to lose themselves...

...you might as well not take any advice at all...

...oh

bigfreddiel

dunstonh wrote: »

Yes. I have averaged over 12% a year since mid 90s. That is not the same as what bigf is claiming though.

actually it was - just couldn't remember how much - please post how its done and the risk profile you adopt

cheers

fj

bigfreddiel

Neverland wrote: »

No ...he called me a bigf....which is quite rude really

See #26

actually i think he was referring to me and couldn't be ars*d to spell it out fully - and anyway Neverland - you and I - the trolls - are thinking along the same lines - ifas may have their uses - not entirely sure where tho' - but like consultants who use your own watch to tell you the time and then charge you for the privelige!

fj

Neverland

bigfreddiel wrote: »

actually i think he was referring to me and couldn't be ars*d to spell it out fully - and anyway Neverland - you and I - the trolls - are thinking along the same lines - ifas may have their uses - not entirely sure where tho' - but like consultants who use your own watch to tell you the time and then charge you for the privelige!

fj

Boat drinks :beer:

jamesd

jamesd wrote: »

An 8% drop for last year isn't unreasonable.

bigfreddiel wrote: »

thats odd - i've seen posts on this forum claiming that their investments make 8+% yer on year - some even claim 15-30%

Volatility varies. You'll generally find me saying that the FTSE can drop as much as 45% in a bad year, so 8% is trivially easy to see if it was invested in just that. Long term averages are a different matter and those are positive. The ups and downs are the price for the higher returns available compared to savings accounts. No such thing as a free lunch and volatility is the price paid.

bigfreddiel wrote: »

strangely they never actuall say how the do it despite asking.

I've described it many times for myself, so some are content enough to explain the general principles.

Neverland wrote: »

- I went back in to equities in March 2009 in a big way ... I'd like to say this was genius but actually it was just pure luck

I did something similar but it wasn't luck, it was a deliberate, planned and successful move. Set myself up with salary sacrifice down to as close to minimum wage as I could go in May 2008 and bought at a high rate through 2008's lows then used leverage in 2009 to benefit more from that wonderful year. I more than doubled my net worth during the 2009/10 tax year. Hasn't been a year since I started paying attention that my net worth has increased by less than 50% of my income and the long term average is closer to 100% of it.

jamesd

sazz1006 wrote: »

All I asked for was whether the fee was reasonable

You're doing OK. If you want to open up yourself to a disagreement about active or tracker funds do feel free to say which funds you're using so we can take a look at what the IFA has done with the investments. The active/passive stuff is often a religious matter, not that many like me who'll use both freely and who are happy to give guidance on either approach depending on what the questioner wants.

The post from Nearly Old is a good one, nothing wrong with shopping around for a different IFA if you're unhappy, though you don't seem to be getting a particularly bad deal if you're otherwise content.