So I'm thinking of starting with a Stakeholder Pension but....

jem16

JuniorSherlock wrote: »

Right, update is that the IFA came round.

As the first half hour was free it was very frustrating to have this half hour taken up with a lengthy explanation of what they did, what I should expect, what to do if I have a complaint, how I can still see someone else, etc, etc. So I was into the paying bit and hadn't learnt anything new.

That's what the IFA has to do - he is following regulations. He must lay out his terms for fees etc.

Then we went through my financial situation and I have to say, some of the questions were very personal, such as how healthy we are and if we smoked or drank. He did make an attempt at getting me interested in Life or Critical Illness cover which I declined. I only wanted pension advice and by this point I was getting really frustrated.

Again this is normal. A full fact-find has to be done so that the IFA can get a full picture before making advice.

The last half hour was taken up with talking about my attitude to risk and pensions. He mentioned the Aviva one and multi-manager schemes which I had already looked at myself and to be honest, I only didn't get one out myself because I thought that someone unacquainted with the finance world, like myself, probably needed something different.

Again all fairly normal. The IFA has to go away and do proper research. He can't just come up with a recommendation on the basis of a half hour chat with you.

In short, he didn't tell me anything I didn't already know. At the end he explained the charges were £300 or I could pay through the scheme I chose. They would charge me 0.75% and as time went on this could be negotiable.

So have you agreed to the fees and indicated that you wish to proceed?

He telephoned yesterday to suggest a pension scheme by Scottish Widows which is a multi-manager type fund charging 0.9% pa.

I do feel as though actually, I could have saved myself some money by going with the advice on here. It looks quite similar to the Cavendish one. Yes I know he will keep an eye on it for me and do annual reviews but then so would I, after all it's my money invested so I'm bound to.

Would you have done so though?

I really don't know if getting an IFA was worth it to be totally honest.

It seems to have got your started.

gadgetmind

dunstonh wrote: »

Honestly, would you do that? Most may start with that intention but very few do.

Surely most who'd fall into this category use an all-in-one portfolio fund so don't actually need to rebalance?

jem16

gadgetmind wrote: »

Surely most who'd fall into this category use an all-in-one portfolio fund so don't actually need to rebalance?

Surely most who fall into this category don't actually know that they need to choose an all-in-one portfolio fund?

gadgetmind

jem16 wrote: »

Surely most who fall into this category don't actually know that they need to choose an all-in-one portfolio fund?

They do if they ask here.

It's also typically the default for many PPs and stakeholders.

JuniorSherlock

Firstly, yes I suppose I can see that the personal questions were relevant.

Secondly, he may have been compliant with the rules on laying out terms however everything he told me was in a 10 page document that he gave me. I was reading it whilst he was going through it. I found it patronising that perhaps they thought I was incapable of going through it myself. What is the point in wasting half an hour going through a 10 page document that is there in black and white? Even when you buy a house, the solicitor doesn't sit there and go through the whole contract with you, it's up to you to read it. It should be the same here.

Thirdly, I will not get £20 for every £80 that I put in as I currently do not earn enough to pay tax.

Fourthly, since I keep on top of every other aspect of our finances and move them around to make sure we are getting the best deal then yes, I would be bothered to keep on top of a pension.

Lastly, a multi-manager fund is what he has suggested which is what I was also thinking of after doing my own research. Yes it has been recommended on here and also in many financial articles and blogs. It's not hard to find good recommendations online these days.

I would have sorted out a pension without an IFA, that is what I was thinking of doing all along hence this thread.

Yes I am going to pay him, I have no choice as he spent around 2 hours here, the last half hour taken up with asking me relevant questions about risk attitude, my future goals and discussing pension funds.

I either pay him the £300 up front or they charge 0.75% on top of any charges by the pension fund. As the one he has suggested so far is by Scottish Widows, who charge 0.9% it would be on top of that, which would make it more expensive than the Aviva one I was looking at which was 1%.

I now have to decide whether to go with his recommendation or not and how to pay him.

Lokolo

JuniorSherlock wrote: »

Thirdly, I will not get £20 for every £80 that I put in as I currently do not earn enough to pay tax.

Non tax payers can still get tax relief, (so extra £20) but it is limited.

You can add up to £2880 and get 20% tax relief, bringing it up to £3600.

gadgetmind

JuniorSherlock wrote: »

Thirdly, I will not get £20 for every £80 that I put in as I currently do not earn enough to pay tax.

This is actually a bit of a sweet spot. Even though you don't pay tax, you still get tax relief as if you did! A non tax payer can put in up to £240 pcm and HMRC will chip in 25% more on top, so that £80 does turn into £100.

It's then quite likely that you won't pay tax on a fair chunk of your final pension income due to the gap between state pension and your personal allowance.

JuniorSherlock

I didn't know that, I assumed I wouldn't get tax relief as my annual income is just below the threshold.

Had a quick look at my husband's pension scheme just brought in by his company and it's quite a good crack, I'm jealous! I don't think the public sector quite realise just how good they have it compared to the private sector.

dunstonh

Secondly, he may have been compliant with the rules on laying out terms however everything he told me was in a 10 page document that he gave me. I was reading it whilst he was going through it. I found it patronising that perhaps they thought I was incapable of going through it myself. What is the point in wasting half an hour going through a 10 page document that is there in black and white? Even when you buy a house, the solicitor doesn't sit there and go through the whole contract with you, it's up to you to read it. It should be the same here.

I agree with your sentiment but this is the way the regulator likes it on face to face appointments.

Lastly, a multi-manager fund is what he has suggested which is what I was also thinking of after doing my own research. Yes it has been recommended on here and also in many financial articles and blogs. It's not hard to find good recommendations online these days.

its also not difficult to find duff recommendations online as well. Knowing what is good and bad is the key.

As the one he has suggested so far is by Scottish Widows, who charge 0.9% it would be on top of that, which would make it more expensive than the Aviva one I was looking at which was 1%.

Is the SW fund an externally managed fund or internally managed? I would expect the adviser would have no difficulty beating Aviva at 1% if using internal funds.

gadgetmind

My personal experience is limited, but I'm fairly happy with some of the Friends Life internal funds (and funds of funds) and these can be accessed via Cavendish for 0.7%.

My fairly large GPP is mostly in a FL Balanced Index Enhanced FoF with some extra non-UK alongside to dilute the large UK holding of that FoF and some extra EM, for which I have gone actively managed.