paying an IFA with regards to pensions

dunstonh

What qualifies you to know a SIPP with HL or an Aegon fund switch is the right thing to do?

Do you remember the person that transferred from Aegon to HL and used an HL MM fund on the basis of the SIPP being low cost and better. It turned out the Aegon pension had lower charges and the aegon fund had outperformed the HL one.

In this case, I am not sure the ongoing servicing fee is required on a small fund value like that. That is unless it is part of a wider arrangement with the IFA.

UsernameAlreadyExists

mania112 wrote: »

What qualifies you to know a SIPP with HL or an Aegon fund switch is the right thing to do?

You assume you're doing the right thing, but you have no idea.

Are you serious?
I will look into it myself. I can read websites as well as anyone else.
ALL pension funds are a pure gamble.
How do you know which lottery numbers or horses to put your money on?

mania112 wrote: »

Most other members of the public use common sense and hire a professional to advise them on the right moves to make with their money.

Maxwell?
Government policy changes?
Who can predict the future?


EDIT: a "Professional" is someone that's paid (clearly out of your money) to tell you what to do with it.

DavidLaGuardia

UsernameAlreadyExists wrote: »

ALL pension funds are a pure gamble.
How do you know which lottery numbers or horses to put your money on?

You seem to demonstate a complete ingnorance in the complexity and diversity of risks and costs involved if you can make such a sweeping analogy.

If you believe pensions are that straightforward, you clearly havn't looked "under the bonnet" of any of them.

+What has Mawwell, misappropriating pension funds got to do with any of this? Causality and relevance worthy of a Daily Mail article?

UsernameAlreadyExists

Maxwell?
well ... errr ... a whole load of pension funds just disappeared instantly. Obviously not a single one of them took "professional" advice, and not a single one of them was affected. Not.

My point was that not one of them knew that a large proportion of their working life pension contributions disappeared into fresh air because of an "unforeseen" circumstance.

What on earth do you think the fund managers do all day, every day?
Kweku Adoboli is another example.

And now there's a law change so that everyone needs a pension. there's a hell of a lot of responsibility placed on the shoulders of professional gamblers.

and the FAs, look at the projected and hypothetical returns to make judgements.

KFCMike

I love IFA related threads on this forum the bashing they get for providing a service is usually quite amusing. One this I have never seen on this forum though is a thread telling people not to use..

Gardeners
Plumbers
Mechanics
Builders
Or any other service provider because it's cheaper to DIY

Is it because it's generally accepted that if you choose to DIY a task like building and you get it wrong the results if you mess it up can be very expensive?

What are the results of messing up your investments?

GhIFA

UsernameAlreadyExists wrote: »

Maxwell?
Government policy changes?

People lost their pensions not because of any advice they were given, but because of a criminal action by one man. How does this render any advice given on pensions worthless??

In addition, what have government policy changes got to do with obtaining advice?? They'll affect anyone who goes down the DIY route as well.

Some people are comfortable with DIY, some are not. For those that are all well and good, for those that aren't then they can pay for the service from a professional. It's the same principle as most things in life.

quattro2

I think the problem lies with the 'cowboys' from the past & the way all paperwork is worded 'investments can rise & fall, past performance is not a guarantee of future returns' etc etc which makes people think twice about paying someone to do something for them which offers no real guarantees, so people like myself & others think DIY then you only have yourself to blame if it goes wrong, each to their own i suppose. In my case i had an advisor wanting 5.5% of the transfers to switch to a single fund in a sipp which was too much and after some extensive research saved myself a lot of money ie 2 years worth of contributions + which made it worthwhile.

dunstonh

People lost their pensions not because of any advice they were given, but because of a criminal action by one man. How does this render any advice given on pensions worthless??

It was also on a type of pension that has nothing to do with the type of pension an IFA would retail. Plus, because of that action, consumer protection was introduced to prevent it happening again.

I think the problem lies with the 'cowboys' from the past

You are probably right. However, when you look at IFA complaint stats which are now under 1% of complaints at the FOS and the fact the FOS just last month publicly praised IFAs for complaint handling and confirmed most complaints are rejected and not overruled by the FOS because of good record keeping to support the advice, it does suggest that IFAs are not a problem. IFAs are also responsible for two thirds of retail pension transactions. The historic problems shouldnt really be looked at with modern retail distribution.

In my case i had an advisor wanting 5.5% of the transfers to switch to a single fund in a sipp which was too much and after some extensive research saved myself a lot of money ie 2 years worth of contributions + which made it worthwhile.

Sometimes IFAs, like most businesses, will price a job they dont want to do with a fee that acts as a passive blocker. The IFAs that have a business model that targets larger investors for example will typically look to price out smaller investors. Rather than say we dont want you, they price it so the person walks away. Insurance premiums are similar. Always wondered why some companies price massively above others? Rather than refuse, they give a price that is a passive blocker. It could be the adviser was greedy with 5.5% or it could be that in relative monetary terms, the 5.5% was actually fair value or it could be they didnt want to do it.

I charged someone around 5% recently. It was a transactional case rather than my usual servicing cases (which is my main business area). In monetary terms it was £1200. However, the product pricing overall gave a better pricing than a certain company that appears on this website frequently who would have earned less if they had done it but also been worse off as a bottom line for the individual.

purplejumper

'Most people have the ethics to not employ someone to do work and then pull out to DIY. However, your morals are your own and if that is what you want then that is your choice.'

thanks for all your comments - although i was a little shocked by the implication of this quote as I had no intention of being unethical or that i had morals of question....! - I just didn't know what to do to.

UsernameAlreadyExists

dunstonh wrote: »

Sometimes IFAs, like most businesses, will price a job they dont want to do with a fee that acts as a passive blocker. The IFAs that have a business model that targets larger investors for example will typically look to price out smaller investors. Rather than say we dont want you, they price it so the person walks away. Insurance premiums are similar. Always wondered why some companies price massively above others? Rather than refuse, they give a price that is a passive blocker. It could be the adviser was greedy with 5.5% or it could be that in relative monetary terms, the 5.5% was actually fair value or it could be they didnt want to do it.

Do you think this is ethical? So is the onus on the client to get multiple quotes for the same job from different IFAs and go for the lowest price? This is what happens in other businesses, but people would likely assume that their selected IFA is obliged to give them best advice ... not just fob them off if the job is too petty and won't earn them enough!