Pension & Independant Financial Advisor Advice.

JeffVader

Hi.

I've been to see a local Independant Financial Advisor who I found via unbiased.co.uk

Her rating is very good with lots of positive comments.
Is there any other way I can ensure she is reputable and that the advice she has giving can be trusted ?

I've only met her twice and on both accounts I've been quite impressed, but last time I did feel slightly pressured into signing up with her.

I have several pensions that I've done nothing with. Paid into them for a few years and then nothing further.

One has a transfer value of around £3,000 and annual running costs of around 1.7%, the other around £30,000 and running costs of 2.4%

The suggestion is to move them all into one new pension which will have running costs of 0.6 - 0.8% so quite a saving. This could work out quite a difference in what money is available when I retire.

Including in the costs is a fee of around £1,500 - £1,750 for the financial advice.. is this a normal amount ? or good / bad ?

I'd just like to get some feedback before I sign up..
I'm not going to post company or individual names as I don't think that is fair.

Any helps or advise will be appreciated.

Thanks

saver861

JeffVader wrote: »

Hi.

I've been to see a local Independant Financial Advisor who I found via unbiased.co.uk

Her rating is very good with lots of positive comments.
Is there any other way I can ensure she is reputable and that the advice she has giving can be trusted ?

It really depends on what you mean by 'trusted' but, my suggestion would be to get yourself as clued up as possible about your circumstances. Coming on here is a good start. If you are unsure yourself then you have no idea what she is advising is appropriate or not.

JeffVader wrote: »

I have several pensions that I've done nothing with. Paid into them for a few years and then nothing further.

One has a transfer value of around £3,000 and annual running costs of around 1.7%, the other around £30,000 and running costs of 2.4%

The suggestion is to move them all into one new pension which will have running costs of 0.6 - 0.8% so quite a saving. This could work out quite a difference in what money is available when I retire.

Sure it will on those costs.

JeffVader wrote: »

Including in the costs is a fee of around £1,500 - £1,750 for the financial advice.. is this a normal amount ? or good / bad ?

I'm not quite sure if you are saying that is what she is charging to move your pensions. I'd be doing a runner if so. You don't need an FA to move pensions - but you do need advice to know where to put them etc if you are unsure.

There are various charging structures for FA and it depends on what you want and the size of your portfolio. Many FA's don't deal with less than £50,000.

kidmugsy

£1500 for advice on £33k sounds a lot, but her fee structure might also have charged £1500 on £60k, say. I suspect that financial advice will always seem pricey on modest sums. If you've learned a lot from her, that's a consolation.

At that price I suppose I'd be very reluctant also to pay ongoing fees unless I thought I'd really need my hand holding indefinitely. Does her advice point you to a pension portfolio that you could easily run yourself?

dunstonh

Is there any other way I can ensure she is reputable and that the advice she has giving can be trusted ?

Statistically, IFAs account for under 1% of complaints at the FOS. So, whilst no-one can claim perfection, it is generally regarded as a reputable distribution channel.

I've only met her twice and on both accounts I've been quite impressed, but last time I did feel slightly pressured into signing up with her.

Possibly as you have now met twice and still not given that commitment. The first appointment is usually free. Not the second (although the adviser can choose not to charge). So, you have now got to the commit (or not) stage.

Including in the costs is a fee of around £1,500 - £1,750 for the financial advice.. is this a normal amount ? or good / bad ?

It is the going rate in monetary terms. On fee basis, that fee doesnt look that attractive on a small fund value like yours. Whereas on a larger fund, it looks better value. However, that is the nature of fees. The comparison on charges will be done net of charges. So, that 0.6-0.8% is probably the reduction in yield due to charges (both advice charge and product charges). Adviser charges are required to be included in the comparisons.

JeffVader

Thanks - I've still not sorted this out.

It appears they take their fee from my lump sum and invest the difference.

This changes the annual running cost from 0.3% to 0.8%
Which seems quite a hike.

The other thing that concerned me was she presented me with a mound of paper work and said sign here..

When I said I'd like to read before I sign, she got very upset and suggested I was calling her integrity into question.

Is that normal. ? shouldn't she expect I'd want to read it and make a decision then ?

Thanks

dunstonh

It appears they take their fee from my lump sum and invest the difference.

That is one of the most popular ways of doing it but not the only way. However, it makes absolutely no difference whether you do it that way or pay it by cheque separately in terms of what the adviser gets paid. However, with pensions, it makes sense to pay the fee from the pension as you effectively get tax relief on the fee. Whereas you dont if you pay it by cheque.

This changes the annual running cost from 0.3% to 0.8%

It changes the reduction in yield due to all charges as obviously the initial charge is included in that. Reduction in yield is the impact of charges. Not the actual charges. The annual charges wont change.

If you pay the fee externally, the reduction in yield will be lower but the annual charge will be the same as you would pay if you paid it within the pension. Except you miss out on the tax relief with the fee.

When I said I'd like to read before I sign, she got very upset and suggested I was calling her integrity into question.

Is that normal. ? shouldn't she expect I'd want to read it and make a decision then ?

Possibly a little frustration at how long you are taking to do what is largely a routine transaction. After all, when you first posted, you already had seen her twice. Now, 5 weeks later and another visit, you are still not committing.

sandsy

How many years from retirement are you?
Would you also be opting for ongoing advice every year? Is this built into the charges at all?

xylophone

You mention "several" pensions - do you mean only two?

Are you currently paying into your employer's pension scheme?

If you transfer, will you continue to pay into the new pension?

JeffVader

Hi
I was asked to sign on the second visit.. there hasn't been a third as yet.

I'm 46, have two old pensions but I'm not currently paying into anything.

I plan to take up the work place pension when that is offered.

I have the option of paying into the new pension, the minimum is £200 per month. Is it worth doing that and the work pension ?

Thanks

xylophone

Have you considered the DIY option for the old pensions?

Example http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/

http://moneyweek.com/personal-finance/isas/stocks-shares-isa-providers-cost-comparison-table/

It would be possible to contribute to a private pension and to an employer's scheme.

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

philwal_2

The initial advice charge does sound expensive. I would maybe speak to another IFA and see what they would charge for the transaction. Does the 0.8 include the adviser ongoing fee or would that be an added extra.