Can I top up my pension without going through finanical adviser?

saver861

jamesd wrote: »

Do you think it is OK to ignore a client's instruction not to make an investment move, say it won't be charged for, do it anyway and charge the client anyway? I don't.

If that describes an accurate account of what took place then you would be correct that it is wrong. However, there is no way of knowing the detail of the conversation to draw a firm conclusion.

In addition, if you are going to ignore the advice of the FA then why employ one in the first place? Presumably there would have been negotiation and reasoning.

On the other hand, the OP stated he did not want to have the ISA's transferred but agreed to it in the end.

So it comes across as the adviser has not switched when requested and has talked the OP into switching the ISA's against his wishes. That does sound like a relationship either gone wrong or certainly going wrong.

Personally, while I think I am reasonably astute on general financial matters, I don't feel I know nearly enough to select any particular funds for investment options. If I did select funds, I would be pitching in the dark because I would have no real basis for my decision. Merely looking at a graph is certainly not enough to make a decision.

jem16

saver861 wrote: »

If that describes an accurate account of what took place then you would be correct that it is wrong. However, there is no way of knowing the detail of the conversation to draw a firm conclusion.

I think this is a very important point. We are only hearing one side of the story and the OP hasn't been back as yet to clarify anything.

In addition, if you are going to ignore the advice of the FA then why employ one in the first place? Presumably there would have been negotiation and reasoning.

A very major point. An IFA cannot simply change funds without agreement from the client. There would have been a discussion and the OP does state that an agreement was reached on the use of the Cirilium funds. If the Op wasn't happy to go ahead then that was the time to say. As to the 1% charge after saying there would be no switching fee, presumably the OP would have brought that up rather than just sign on the dotted line?

So what we appear to have here is a client who has agreed to certain changes whilst talking to the IFA but who has later changed his/her mind. Communication is key to everything in a relationship between client and IFA - if the client does not say what he/she really thinks then I'm not sure how the IFA would know.

saver861

jem16 wrote: »

I think this is a very important point. We are only hearing one side of the story and the OP hasn't been back as yet to clarify anything.

True and even then its just a few lines of text so not possible to make any form of judgement.

Not that I'd be one to stick up for IFA's, defo not - that said, personally, I have a grievance against anyone I have to pay money to regardless whether it is man, woman or beast

Clearly we need to be protected from dodgy IFA's as much as dodgy mechanics, plumbers etc. However, equally there will be decent IFA's out there trying to make an honest crust, soooooo .....

The OP has said they have been with the IFA for a few years so that should be enough time to ascertain the overall professionalism of him or her.

cornfake

We agreed to the fund switch in the ISAs because the adviser said there would be no charge. At the end of the meeting she handed us forms to sign and said “This is for my fees”, we assumed that it was the fee for that meeting. It transpires that this is a new charge from our ISAs of 1% per year for a Regular Review Service. I thought it sneaky because she didn't ask if we wanted a Regular Review Service.

Is it necessary to see a financial adviser *every year*? The only transaction going-on is money going into our pensions. In what way would the adviser be adding value to our investment portfolio through this review service? We only have investments in two funds now. If we are happy with the performance of the funds, what is there for the adviser to do?

jem16

cornfake wrote: »

We agreed to the fund switch in the ISAs because the adviser said there would be no charge. At the end of the meeting she handed us forms to sign and said “This is for my fees”, we assumed that it was the fee for that meeting. It transpires that this is a new charge from our ISAs of 1% per year for a Regular Review Service.

So not an upfront fee for switching but a yearly fee for ongoing servicing then? That's different to what you said earlier.

I thought it sneaky because she didn't ask if we wanted a Regular Review Service.

Why haven't you asked her about it then?

Is it necessary to see a financial adviser *every year*?

No - it's your choice whether you have ongoing servicing or not.

dunstonh

We agreed to the fund switch in the ISAs because the adviser said there would be no charge. At the end of the meeting she handed us forms to sign and said “This is for my fees”, we assumed that it was the fee for that meeting. It transpires that this is a new charge from our ISAs of 1% per year for a Regular Review Service. I thought it sneaky because she didn't ask if we wanted a Regular Review Service.

Previously, it would have been commission built into the annual charge. Now, the commission is rebated or turned off to be replaced by an annual charge that is explicitly disclosed and not built into the fund/provider charge.

Previously, you indicated this was an initial charge. Now you indicate it is the ongoing charge.

In what way would the adviser be adding value to our investment portfolio through this review service?

Depends on your needs. Most advisers have a mix of transactional and ongoing servicing clients. Transactional clients pay for every transaction as they need it. There is usually no automatic review etc. Ongoing servicing covers most if not all events without the need to pay anything further if and changes are needed or when you create work etc.

If you are happy to stick with the same investments and have no ongoing servicing (which would be shortfall planning, due diligence and research and adjustments to match you need) then you dont have to pay it. However, you would have to take on that role yourself.

jamesd

cornfake wrote: »

We agreed to the fund switch in the ISAs because the adviser said there would be no charge. At the end of the meeting she handed us forms to sign and said “This is for my fees”, we assumed that it was the fee for that meeting. It transpires that this is a new charge from our ISAs of 1% per year for a Regular Review Service. I thought it sneaky because she didn't ask if we wanted a Regular Review Service.

I suggest that you ask her to cancel the regular review service that you didn't know you were being signed up to because it wasn't mentioned before you signed. I'm very unimpressed that a financial adviser would sign you up for an expensive service that you didn't know you were being signed up for.

Expensive because annual growth for the UK market has been around 5% plus inflation long term, you'd probably get more like 4% before charges, so in taking 1% she's taking about a quarter of all of your prospective growth.

cornfake wrote: »

Is it necessary to see a financial adviser *every year*?

No. It is not necessary to see a financial adviser ever and certainly not for routine things like paying in money.

jem16

jamesd wrote: »

I suggest that you ask her to cancel the regular review service that you didn't know you were being signed up to because it wasn't mentioned before you signed. I'm very unimpressed that a financial adviser would sign you up for an expensive service that you didn't know you were being signed up for.

I'm not sure we can jump to this conclusion based on what the OP has said so far. To be honest the OP seems a little unsure on several details and what was said to have happened earlier has not actually happened when further details have been provided.

It seems quite likely that the adviser's ongoing fee was being implicitly charged in the previous bundled fund. Now that a fund change has happened it has been to an unbundled fund where the fee is charged explicitly.

Perhaps the IFA did discuss this with the client but the client did not fully understand this? As we're only getting one side of the story (and a rather confused one at that) it's best not to jump to conclusions.

The ongoing fee does sound a bit on the high side considering the amount invested and perhaps there is room for negotiation if the OP feels that a servicing arrangement is a good thing to have.

Cornfake - you really do need to go back to the IFA and talk this over. Communication is the most important part of a good relationship.

dunstonh

I'm very unimpressed that a financial adviser would sign you up for an expensive service that you didn't know you were being signed up for.

You will almost certainly find that the OP has signed two fee agreements that say what the fees are in both percentage terms and relayed in monetary amounts based on the amount they have invested.

1 - the fee agreement to the IFA which the FCA have said must be displayed in monetary terms as well as percentage
2 - Old Mutual platform (ex Skandia) have an adviser fee form that states the percentage figure that applies and is required to be signed.

If the adviser fee form is not signed and returned to Old Mutual, they will not allow any adviser charges to be made.

I am not particularly keen on this adviser's charging method as I dont believe different tax wrappers should have different charges. It allows for an allegation of bias which may not exist (i.e. top up the one that pays 1% instead of 0.5% - could be a valid reason but it also allows the allegation of remuneration bias). The amounts involved are in the ballpark where the adviser remuneration could be 0.5% if they OP shopped around. The old commission rates would also have been around 0.5% before.

it also needs to be noted that this adviser doesnt appear to be an IFA or whole of market adviser (the fund selection is Old Mutual's and with the platform being Old Mutual, this could well be an adviser tied to Old Mutual). Old Mutual bought Intrinsic Network which has IFAs and restricted. Platform and fund from the same provider sounds restricted.

As Jem says, there does appear to be a communication issue here.

jamesd

jem16, dunstonh, "I thought it sneaky because she didn't ask if we wanted a Regular Review Service" appears to make it quite clear what the customer's beliefs were at the time of signing the agreement.

The adviser has done too many things that appear to be either contrary to the client's wishes or without informing the client in advance, and that implies issues beyond just communication.

dunstonh, agreed about the platform bias potential of differing charges, even though an ethical adviser wouldn't let that be a factor.