IFA or not?

artic99

Hi All,

I'm wondering whether this is a situation I should be considering using an IFA or not.

I've two pension pots totalling around £100k and paying in 1k per month (considering more this year), one of these with the majority of the value is no longer being contributed towards but has lower charges. Both are with Standard Life.

The larger one is invested in a mixture of funds originally advised a long time ago or chosen by myself. While they seem to have done well enough I know I've pure lucked out and am no longer happy with this due to the amount of money involved and after all these years I realise I'm likely never actually going to get around to figuring this out like I kept telling myself. The funds area all quite high charged and a couple are merely matching their benchmarks.

The current advice via the financial advisors provided by the company is to just put everything in to the Standard Life Managed Pension Fund which is what's happening with the smaller fund thats receiving contributions.

Now would it be worth my while speaking to a recommended IFA to hopefully sort out my crazy funds with a view to being less crazy and hopefully making more longer term than the single recommendation mentioned above?

What would be the cost of initial/ongoing advice? Not from a being tight point of view just dont want to make a mistake.

Thanks.

GhIFA

Use https://www.unbiased.co.uk to find a number of local IFA's to you. Given your comments it sounds as though taking advice would be beneficial - speak to some local IFA's and ask about what it will cost you. They will need to disclose their costs up front, and will need to be very specific about the service you will get for this, both initially and on an ongoing basis.

I would also suggest speaking to friends/colleagues who may have used an IFA to see if they can recommend.

Make sure the adviser is Independent, - steer clear of bank-based FA's.

gadgetmind

The funds area all quite high charged and a couple are merely matching their benchmarks.

How high is high?

Your choices are to DIY or to employ someone else to do it. If you go for the former, I suggest reading about asset allocation as this is the key to optimising risk versus return.

The current advice via the financial advisors provided by the company is to just put everything in to the Standard Life Managed Pension Fund

I'm sure he's being well paid to dish out that advice as it's the equivalent of a doctor saying, "Take two aspirin and come back in a week." However, it both cases, it would be very easy to do much worse!

dunstonh

The current advice via the financial advisors provided by the company is to just put everything in to the Standard Life Managed Pension Fund which is what's happening with the smaller fund thats receiving contributions.

Effectively the default option which is suitable for those who dont care about investments, wont review them and wont pay anyone else to review them. It wont be the best. It wont be the worst. Probably sensible advice unless it is a large fund. 100k is high enough to get better than that but the adviser for the scheme is probably not being paid to do that.

artic99

To answer both responses. I have had a recommendation which was one of the things that was putting me off in the past, not being able to find anyone that had even used an IFA for this sort of thing never mind saying they were happy with one.

On the fund AMC recently had to do a small transfer where they looked at this one but suggested not transferring because of its lower plan AMC, the aggregate AMC was 1.40.

The main bug with these is that they are sitting pretty much middle of the ground when I compare them to sector equivelants with a lot of similar and cheaper charged ones being better over the years.

Asset management is a mess most high risk and in two areas, it reads diy disaster except for being a bit jammy, could have been a lot worse (would have been worse with doctors current advice). Realistically I've not got the time to figure this out and do it well, its been on the todo for years, and I've too many babies in nappies to be doing it any time soon!

gadgetmind

artic99 wrote: »

the aggregate AMC was 1.40.

Wow, those fees are pretty high.

You need to aim for sub 1% and ideally 0.5%. You can pay more for some parts of your investment portfolio but the bulk needs to be low-fee "beta".

artic99

That's including the plan charge so not quite as bad as it looks I think?

And their advice with the new one did seem a bit basic. Will make the calls tomorrow to the recommendation and perhaps another similar one to see what they can do. Just wanted to make sure it was IFA worthy stuff or not at that value as don't really know anyone thats used one bar one person, even a mention of paying towards a pension to most people I work with or know would result in head shaking.

mark55man

Babies in nappies don't stop you doing a bit of reading - I once read most of a book with an infant asleep on each arm.

Plenty of stuff on investment basics like asset allocation - (you usually have to avoid one or two bits of craziness/dogma). One such offers the advice buy the world with 25% global bond fund 25% uk/eur 25% us and 25% asia + emerging. Again I personally wouldn't fire and forget with my pension fund - did that for too long in my youth

Or you could do worse than look a vanguard lifestyle fund - these mix equity and bonds at 20% 40% 60% 80% (like the pension funds but a bit cheaper)

I use the HL platform and this charges £2 a month and there is an entry dilution of 0.24% so for me this is <0.5% in the first year. I went for 80% equity as this had a bit more global feel and I had other more conservative investments elsewhere

vanguard are renowned in US for cheap index trackers

gadgetmind

mark88man wrote: »

Or you could do worse than look a vanguard lifestyle fund

That'll be "lifestrategy".

My wife has pretty much her entire SIPP in one of those.

As I said earlier, very easy to do much worse.

mark55man

Thank You for the correction gadgetmind - a senior moment

gadgetmind

It's easily done as many pensions use the word "lifestyle" to describe the slow move into bonds as you approach retirement age.

https://www.google.co.uk/search?q=pension+lifestyle