We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Change IFA or just do without one?
Blue_Parrot
Posts: 282 Forumite
We have had no contact whatsoever from the IFA for over three years. Having been obliged to find out from Friends Life directly what the pension is now worth, I am now wondering if we are paying the IFA firm annual commission for doing absolutely nothing.
Friends Life claimed that their 'annual packs' may have been sent to the IFA. Disbelieving this I emailed the IFA firm. The response was a voice mail message from a new bloke telling us that the previous person had left the company (what a surprise) and that he had 'found some paperwork' and wondered what he could do for us (methinks he sensed a sales opportunity). I concluded that they had forgotten all about a client of over 20 years until I prodded them.
IF we have been paying that firm annual or trail commission all these years, is there any way of stopping that income to them? How can I find out if they're making money out of a client's pension contract which they have ignored, without asking them directly?
I'm considering appointing a local IFA whom I have met. But now I'm wondering (a) if he/his firm will charge commission for 'taking over' the pension; and (b) if we even need an IFA at all. I can't see us moving the FL pension, nor can I see us buying any new financial products.
FYI: we're both still working, I am getting state pension in addition to salary, we're not poor, we're healthy, have no dependants, own our own house.
If that's too long, summary is: am I paying the old IFA, fees? How can I stop this? Do I even need a new IFA?
Many thanks in advance.
Friends Life claimed that their 'annual packs' may have been sent to the IFA. Disbelieving this I emailed the IFA firm. The response was a voice mail message from a new bloke telling us that the previous person had left the company (what a surprise) and that he had 'found some paperwork' and wondered what he could do for us (methinks he sensed a sales opportunity). I concluded that they had forgotten all about a client of over 20 years until I prodded them.
IF we have been paying that firm annual or trail commission all these years, is there any way of stopping that income to them? How can I find out if they're making money out of a client's pension contract which they have ignored, without asking them directly?
I'm considering appointing a local IFA whom I have met. But now I'm wondering (a) if he/his firm will charge commission for 'taking over' the pension; and (b) if we even need an IFA at all. I can't see us moving the FL pension, nor can I see us buying any new financial products.
FYI: we're both still working, I am getting state pension in addition to salary, we're not poor, we're healthy, have no dependants, own our own house.
If that's too long, summary is: am I paying the old IFA, fees? How can I stop this? Do I even need a new IFA?
Many thanks in advance.
0
Comments
-
You may be able to stop the trail commission being paid out of your plan by speaking to the FL, though the actual process may prove impractical due to system constraints on older plans.
I don't see how finding out what commission is being paid would help your cause though you can find this on the original illustration (if you still have them).
On a more positive light, if you decide the appoint another IFA to take over the plan he can opt to receive the trail commission in return for an ongoing advice service for you. However, the trail commission may be small and not be enough for him to do his job so he will need to find out and possible agree an addition charge if you want to use him.
You may even be better off with a more modern contract as they have become cheaper and "clean" with no trail commissions. Instead you will pay your adviser directly for any service you receive.
"I can't see us moving the FL pension..." - What makes you certain the FL pension is a good plan still after 20 years?Stephen Covey once said that "when you teach once, you learn twice". That is the primary reason for my participation on the forums as an IFA.
Although I strive to provide accurate information in my posts, there may be the odd time when I fail. Yes I know it's hard to believe but even Your Hero can make mistakes. Apologies in advance.0 -
The best option is to transfer the commission stream to a new IFA.
Turning off the commission completely is unlikely to reduce the cost of the contract to you. But if you so that THEN appoint a new IFA, he will also want a fee for advising you (new advice can't be paid for by commission any more) so you will end up paying him explicitly and paying for commission which FL would pocket themselves. But advice on an existing product can be remunerated by the existing commission stream. So find an IFA who is happy to take you on on this basis and ask FL to transfer the commission payments to this new IFA. Obviously, if you receive other advice from the IFA, it will be chargeable.0 -
Blue_Parrot wrote: »Do I even need a new IFA?
Only you can answer that question.
You felt that you needed an IFA before, so have you gained knowledge since that means you can manage your own investments? If not, what reading are you prepared to do to gain this knowledge?
I used an IFA until about 10 years ago, but didn't go fully DIY until I'd done some research. This is now much easier, but still involves engaging with financial issues.
As I say, only you know.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
I have all the paperwork going back through 20 years+You may be able to stop the trail commission being paid out of your plan by speaking to the FL, though the actual process may prove impractical due to system constraints on older plans.
I don't see how finding out what commission is being paid would help your cause though you can find this on the original illustration (if you still have them).
... any service you receive are the relevant wordsOn a more positive light, if you decide the appoint another IFA to take over the plan he can opt to receive the trail commission in return for an ongoing advice service for you. However, the trail commission may be small and not be enough for him to do his job so he will need to find out and possible agree an addition charge if you want to use him.
You may even be better off with a more modern contract as they have become cheaper and "clean" with no trail commissions. Instead you will pay your adviser directly for any service you receive.
Because, having finally had an uptodate summary of the position of this plan, it is much higher than we thought it would be by now. About £20,000 higher than our guesstimate."I can't see us moving the FL pension..." - What makes you certain the FL pension is a good plan still after 20 years?0 -
I have all the paperwork going back through 20 years+
A 20 year old pension is unlikely to be paying any trail. There is the possibility of a small bit of renewal (pence a year) but most pensions of that era only paid up front.
It may also explain why you have had no contact.Because, having finally had an uptodate summary of the position of this plan, it is much higher than we thought it would be by now. About £20,000 higher than our guesstimate.
That is largely irrelevant. The majority of plans from 20 years ago are poor value compared to today. Some exceptions of course but the majority would not be as good.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Blue_Parrot wrote: »I have all the paperwork going back through 20 years+
... any service you receive are the relevant words
Because, having finally had an uptodate summary of the position of this plan, it is much higher than we thought it would be by now. About £20,000 higher than our guesstimate.
That's good news. Since you have already reached state pensionable age, I suppose the next question would be when and how would you like to draw the benefits from this plan? Older plans tend to be quite inflexible and typically only offer traditional annuities which seem to be extremely out of favour these days.
Having said that your plan may contain invaluable guarantees, including a high guaranteed annuity rate or fund value, and so staying with your particular plan may be the right thing to do. But of course, all this boils down to your preference for income in 'retirement'.Stephen Covey once said that "when you teach once, you learn twice". That is the primary reason for my participation on the forums as an IFA.
Although I strive to provide accurate information in my posts, there may be the odd time when I fail. Yes I know it's hard to believe but even Your Hero can make mistakes. Apologies in advance.0 -
most pensions of that era only paid up front.
Yes, with big fat fees to the salesman and only a sliver left invested.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
That is largely irrelevant. The majority of plans from 20 years ago are poor value compared to today. Some exceptions of course but the majority would not be as good.
Why is that largely irrelevant, since it's performing better than we thought it would (in the absence of any information)?0 -
It's not my pension, it's my husband's personal/company one.That's good news. Since you have already reached state pensionable age, I suppose the next question would be when and how would you like to draw the benefits from this plan? Older plans tend to be quite inflexible and typically only offer traditional annuities which seem to be extremely out of favour these days.
Re: older plans typically only offering traditional annuities, I can see nothing about that in FL's Q+A, viz:
From April 2015 the proposal is that once you’re aged 55 or over, when you decide to start taking your retirement benefits, you will be able to take out as much of your pension fund as you like.
From the Chancellor's statement in March this year:
Let me be clear: No one will have to buy an annuity … He also promised by April next year to remove all remaining tax restrictions on access to pension pots. Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, any time they want. No caps. No drawdown limits.
I didn't include the interim and final bonus in any calculation yet.Having said that your plan may contain invaluable guarantees, including a high guaranteed annuity rate or fund value, and so staying with your particular plan may be the right thing to do. But of course, all this boils down to your preference for income in 'retirement'.0 -
FYI: we're both still working, I am getting state pension in addition to salary, we're not poor, we're healthy, have no dependants, own our own house.
Well you have missed a trick here!!!
Why, if you are still working, are you not deferring your SP? It would get an uplift of 10.4% for each year deferred? so get deferring it now. Can't see you getting 10.4% for it in the bank, can you?0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.3K Banking & Borrowing
- 253.2K Reduce Debt & Boost Income
- 453.7K Spending & Discounts
- 244.2K Work, Benefits & Business
- 599.3K Mortgages, Homes & Bills
- 177.1K Life & Family
- 257.7K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards