IFA home visit re Pension/ISA

jem16

Robin_Jackson wrote: »

I've 35k in the pension with another 20 years left to go so on that basis, the 3% upfront and 5% (apologies on the incorrect 0.05% figure) is over a longer time so therefore easier to cushion.

What age are you now? When you talk of growth for another 20 years, what retiral age are you thinking of? 55, 60, 65?

If the IFA is recommending a move, he will have done a full cost analysis of the old pension against the new pension he propses you move to. This should give you an idea of whether or not a move is good.

I'm just a little confused with your figures though, especially the PA figures. It will not be 0.05% as has been pointed out but now you are talking about 5% which will not be correct either.

Basically there are two sets of figures to think about as far as annual payments are concerned. One is the fee to the IFA which can either be a fixed amount per month or a percentage. The percentage is usually 0.5% ( ie half a percent) but can be up to 1% depending on the value of the investment. However for this fee you would expect the IFA to be offering a servicing agreement - ie looking after your investment and recommending fund changes/rebalancing where appropriate. If he's not doing this then why pay a fee?

The other annual payment is to the fund provider plua pension/platform provider. As the IFA fee should be the same regardless, it's these annual charges that need to be considered when looking at whether a move would be good or not. However you don't mention what these are so it's difficult to offer any suggestions.

I dont think he was impressed with Aviva

He may or may not be but he needs to show why.

the IFA doesnt do anything with the pension, he seemed to think switching it and paying the 3% one off/5% PA was a good idea.

Assuming you mean 0.5%PA for the IFA, why would he expect paid if he's not doing anything with the pension?

I think you need to clarify a few things on your next visit. To be honest your investment is rather small for a servicing agreement at the moment.

jimjames

Robin_Jackson wrote: »

Appreciated.

Am I right in swaying towards the 3% pension and 1.25% ISA then?

Why is there any need to change at all? Why would you not stick with your current provider and keep the 3% yourself?

Paying 1.25% pa to get someone to look after your funds seems high, if done well initially there may not be much at all that needs doing each year.

Also check your numbers - you have quoted 0.05% but as mentioned above this seems very unlikely to be the correct number.

jem16

feesarefare wrote: »

I recently read an article in New Model Adviser magazine where IFA said he does regular rebalancing for his clients and even though the Skandia platform he uses has free auto balancing he does it manually for his high net worth clients as he thinks it adds value :rotfl:

Does the free auto rebalancing just bring the current portfolio back to its appropriate risk profile or does it do something more?

jem16

feesarefare wrote: »

Well for starters I wouldn't come and see you at home. I would take you through our lifestyle financial planning process and probably end up telling you that I couldn't add any value to you at this stage.

Would you charge for this financial planning process?

With your size of pension and isa finding the cheapest option would be best.

I agree but how would the OP know how to find the cheapest option? Presumably he used an IFA in the first place as he didn't feel able to.

feesarefare wrote: »

It rebalances. So yes put the portfolio back into the original asset allocation if that's what you mean. Anything else isn't rebalancing.

I meant as in exact same funds that make up the original asset allocation.

jem16

feesarefare wrote: »

No wouldn't charge -first meeting is at our expense

Good - although I would imagine it's not your full financila planning service. Can't see you doing that for nothing as that would not make good business sense.

I would go online to research the cheapest option. Probably nothing wrong with existing Aviva plan

Quite possibly not. That's why I said the IFA should give a full cost analysis if recommending a move.

You have to do exact same funds , otherwise it's not rebalancing. It's a common mistake lots of IFA s make. Any deviation is a new recommendation that requires new research , suitability letter etc

Fair enough. Perhaps the IFA made the same mistake in the use of the term but actually did a new recommendation as well as the rebalancing.

jem16

feesarefare wrote: »

Correct, but no adviser can every give advice at a first meeting

Absolutley agree.

Yes you made an excellent point, I would be very interested to see the figures

Thank you.

No just clueless and struggling to justify their fees

So you know the advisor in question and are not just going by the article?

P.S. Hope you don't mind. I have tidied up your quotes as they got lost in mine and I nearly missed them.

jimjames

jem16 wrote: »

Would you charge for this financial planning process?



I agree but how would the OP know how to find the cheapest option? Presumably he used an IFA in the first place as he didn't feel able to.

That may be the case but unless the OP has been given the figures he is in the dark and it may just be a case of churning because that gives a sale & commission but leaving as is does not.

My fingers have been burnt in the past (admittedly a long time ago and things have probably changed) when advised to take out a personal pension and cancel my final salary scheme. Not exactly great advice.

jem16

jimjames wrote: »

That may be the case but unless the OP has been given the figures he is in the dark and it may just be a case of churning because that gives a sale & commission but leaving as is does not.

Agreed which is why I said this way back in Post 14.

jem16 wrote: »

If the IFA is recommending a move, he will have done a full cost analysis of the old pension against the new pension he propses you move to. This should give you an idea of whether or not a move is good.

jem16

feesarefare wrote: »

Don't know the adviser , but read the full article and found the whole thing bizarre. Clients paying 1% pa for rebalancing on a platform that does it automatically ?

Unfortunately articles can often not tell the complete picture.

jem16

feesarefare wrote: »

Perhaps he hasn't , hence the confusion?

Confusion for the OP or jimjames?

I agree - it may not have been done which is why I brought it up for the OP to be aware of.