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IFA Quote for Drawdown
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HL have discounts on quite a lot of funds or cheaper classes which aren't available on other platforms.
Tiny discounts making barely any difference and many platforms have discounted terms. Some on the same funds, some on others.Really? HL's drawdown charges are cheaper than most platforms when I last looked into it.
You havent looked at IFA platforms. For example, Old Mutual have no drawdown charge any more (dropped it a month ago). They appear to have moved to an almost single price model. Not cheap on small stuff but then small stuff it unlikely to be doing drawdown.
Ironically, HL is £1 a year cheaper than the UKs largest drawdown supplier. Although their pricing ranges from 0.35% to 0.9% including fund charge (some external fund charges could apply). So, the annual costs are lower than HL for most.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 -
You havent looked at IFA platforms. For example, Old Mutual have no drawdown charge any more (dropped it a month ago). They appear to have moved to an almost single price model.
Does one have to pay an IFA in order to have access to the cheaper IFA platforms? If so, would IFA + IFA platform charges still be cheaper than the cheapest generally available platform?
How does the service and support of, say, Old Mutual compare with, say, Hargreaves Lansdown?0 -
hullenedgers wrote: »He now has come back to me with a quote for organising getting the tax free element and setting up and managing the drawdown with an annual review of how the various investments are performing.
His initial fee would be £5000 (1.25% of the whole £400000) which could be paid by cheque or deducted from the plan. Ongoing fees would be 2.75% pa coming out of the plan of which the IFA will receive 0.75% pa (£250 per month/£3000 pa). This certainly seem to be a lot of money to cover one annual review.
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Appreciate the amount of work involved may be different,but I engaged an IFA 18 months ago for a review of pensions ( DB and DC) and other savings such as ISAs, in advance of retirement .The DC fund was transferred into a SIPP which I am intending to defer,although ready for drawdown as and when I wish to.
Have checked the charges and they were 1% for the pension transfer,which was regarded predominantly as payment for advice,and 0.5% ongoing ( annually reviewable).SiPP is in the region of £250k.Bear in mind that if you pay the fee out of the SIPP you save 20% VAT
I continue to use the IFA for pension/tax/estate planning and the amount of work he has done for me this year makes the ongoing 0.5% good value and would have cost more on an hourly rate.For a once a year meeting it might be expensive so I would discuss with him both the upfront fees and what you can expect to get for the ongoing 0.5%.
This was in London,so the proposed fees seem on the high end from my experience and worth some negotiation.
I am economically literate but don't for one minute regret taking qualified advice.For those who have focussed on costs alone,I would observe that deciding a strategy for investing several hundred thousand pounds of your life savings over a 30 year period in retirement is a totally different situation to bunging a few hundred quid a month into a low cost tracker.There is no market to beat anyway,so I've no idea what Harrys friend is trying to achieve
Looking forward into retirement ,the bottom line is that preservation of capital ( inflation adjusted),stability of return and limitation of volatility are absolutely key - yet risk still has to be taken to achieve these objectives.A knowledgeable and experienced DIY investor can certainly achieve this, but I suspect many if not most DIY investors would benefit from advice when it comes to de-cumulation.0 -
Does one have to pay an IFA in order to have access to the cheaper IFA platforms?
In most cases yes.If so, would IFA + IFA platform charges still be cheaper than the cheapest generally available platform?
No. The cheapest are about the same. Although the DIY market is more focused on SIPPs. The adviser market still looks at insured contracts, PPPs and SIPPs. The Consumer Panel are concerned at the SIPP activity on the DIY side.How does the service and support of, say, Old Mutual compare with, say, Hargreaves Lansdown?
Its a different service level. So, you cant compare. For example, the IFA platforms look at data supply into IFA back office software, research tools etc. Also, the IFA platforms are generally dealing with more knowledgeable individuals looking for technical support. The DIY platforms cant do that.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 -
Tiny discounts making barely any difference and many platforms have discounted terms. Some on the same funds, some on others.
On a large fund like the OP's you could probably negotiate a 0.2% platform charge with HL and could get trackers at 0.06% TER.You havent looked at IFA platforms. For example, Old Mutual have no drawdown charge any more (dropped it a month ago). They appear to have moved to an almost single price model. Not cheap on small stuff but then small stuff it unlikely to be doing drawdown.Ironically, HL is £1 a year cheaper than the UKs largest drawdown supplier. Although their pricing ranges from 0.35% to 0.9% including fund charge (some external fund charges could apply). So, the annual costs are lower than HL for most.0 -
hullenedgers wrote: »I have received a quotation from a local IFA to organise and manage a drawdown but have no way of knowing if the figures quoted are good value, and tend to think they seem rather high.
I have a pension pot of just over £400000 before taking the 25% tax free leaving around £300000 to go into drawdown.
So far the IFA has contacted the pension companies on my behalf to confirm the actual terms of the various funds , one large replacement policy fund and a decent stakeholder with Aviva and 3 smaller ones with other companies two of which he says could qualify as stranded pots. All this has been done FOC for which I am grateful.
He now has come back to me with a quote for organising getting the tax free element and setting up and managing the drawdown with an annual review of how the various investments are performing.
His initial fee would be £5000 (1.25% of the whole £400000) which could be paid by cheque or deducted from the plan. Ongoing fees would be 2.75% pa coming out of the plan of which the IFA will receive 0.75% pa (£250 per month/£3000 pa). This certainly seem to be a lot of money to cover one annual review.
I am not averse to going DIY as we are reasonably investment savvy with our other investments and do understand there will be various charges no matter which route we take.
Any thoughts would be greatly appreciated.
2.75% a year is an absolute rip off. that's like £8k a year on £300k!!!!
if I was you I'd be telling him to stick it.0 -
Whilst some may be limited companies (and the trend it that way), most have been sole traders or partnerships. With no long stop on financial services, these IFAs will still be paying PI insurance in their 90s.
Most industries have some for of long stop and advisers are nearly unique in having none. It should come but I dont think it will be any time soon.
If they were too stupid to understand limited liability that is offered by incorporation should members of the public have entrusted them with their savings and investments. Plumbers, chippies etc etc have had PII for years as have accountants, solicitors engineers.
The self employed numbers are really quite small as most have long since retired and gone. The realistic chances of these IFA's being pursued and paying PII into their 90's is just an industry myth.0 -
addedvaluebob wrote: »If they were too stupid to understand limited liability that is offered by incorporation should members of the public have entrusted them with their savings and investments. Plumbers, chippies etc etc have had PII for years as have accountants, solicitors engineers.
The self employed numbers are really quite small as most have long since retired and gone. The realistic chances of these IFA's being pursued and paying PII into their 90's is just an industry myth.
Not that you would know.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 -
addedvaluebob wrote: »The realistic chances of these IFA's being pursued and paying PII into their 90's is just an industry myth.
Really????
http://www.professionaladviser.com/ifaonline/news/2187187/retiring-ifa-pursued-claims-firm-23I am an Independent Financial Adviser specialising in Pensions and Retirement Advice.
Anything posted on this forum is for discussion purposes only. It should not be considered financial advice. Please seek advice from an Independent Financial Adviser who can advise you after finding out more about your situation.0 -
richardg_ifa wrote: »Really????
tbh, I don't really have a lot of sympathy for an industry that sold a product and expected commission for that product decades later.
or do you just think an IFA should get trail commission and not be expected to provide any on-going advice?0
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