Indepenedent advisor

TH1878

Crocgunnd wrote: »

Right, I've been in touch with a local IFA and ran through what I was looking for. I asked for a price after the initial consultation. The answer was "4%".
"Of what?" I said
"Any funds that are transfered to another provider. Otherwise it's free"
This is what I was afraid of. It's in the IFA's interest to recommend a transfer otherwise he doesn't get anything out of it.
I have an appointment to see what he has to say, but it is bothering me.

I don't like this method of charging but it's not unusual though.

As you say, it's in the adviser's best interest to recommend a transfer but it's also saying that the value of advice is in setting up a new financial product. Clearly, that isn't the case (you could set one up on HL within 10 mins) so I struggle to understand why advisers still insist on charging this way.

More and more advisers are starting to charge an advice fee and an implementation fee, which I think is a much more sensible way of charging.

jem16

Crocgunnd wrote: »

Right, I've been in touch with a local IFA and ran through what I was looking for.

What did you say to the IFA as to what you were looking for?

I asked for a price after the initial consultation. The answer was "4%".
"Of what?" I said
"Any funds that are transfered to another provider. Otherwise it's free"

To give us an idea of how much that equates to, what is in your total pot?

This is what I was afraid of. It's in the IFA's interest to recommend a transfer otherwise he doesn't get anything out of it.
I have an appointment to see what he has to say, but it is bothering me.

There are many IFAs who will come back and say that transferring is not in your best interests and there is no charge although I can understand you being wary.

However you need to tell us a bit more about your reasons for seeing an IFA in the first place. What kind of pension do you have?

Crocgunnd

I'm looking at packing up work sometime next year. As of January, I'll have 2 years to my normal pension date.
I'm already drawing a small company "Final Salary" pension and have 2 other small pensions plus a small private one. The 3 outstanding pension total around 50k.
We have a small savings pot and we are selling our house to downsize, there will be enough surpluss from the sale to see us through to retirement date but I want to draw on these other pensions to offset how much we take from that capital.

Now, I'm an electrician, not a banker so have little idea about what is the best way forward. This is the reason for talking to someone that knows these things but obviously I'm vulnerable to being fobbed off.
Do I consolidate all these funds into one pot?
Do I draw whats being offered by each?
Do I leave them in place until retirement and live on savings?
Are "stocks & shares ISA's" trustworthy for an income?
And so it goes on.
I'm now thinking of cancelling the appointment and try someone else.

jem16

Crocgunnd wrote: »

I'm already drawing a small company "Final Salary" pension and have 2 other small pensions plus a small private one.

I'm assuming by private you mean a Personal Pension. What are the other 2 pensions? Are they company pensions and are they Defined Benefit ( ie final salary ) or Defined Contribution ( ie invested in funds and have a pot of money )?

The 3 outstanding pension total around 50k.

So if all 3 required transferring that would be £2000. That's not bad in itself providing you are getting full advice on what is best for your whole situation.

Do I consolidate all these funds into one pot?
Do I draw whats being offered by each?

Assuming Defined Contribution schemes then it's unlikely to be best taking what is being offered by the providers unless there are guarantees attached. Who are the current providers?

Do I leave them in place until retirement and live on savings?

If Defined Contribution there is no retirement age other than age 55. They are not like Final Salary pensions where there is a specific scheme age for retirement.

However you need to give us a bit more information on what those 2 small pensions are.

Are "stocks & shares ISA's" trustworthy for an income?

As trustworthy as pensions. The ISA is just a different type of tax wrapper - it's the investments inside that matter and can just as easily provide an income. However it's not a guaranteed income unlike your Final Salary pension - it's subject to stockmarket movement.

Your other pensions may be the same and you may need to decide on an annuity or drawdown. The IFA should help with that.

I'm now thinking of cancelling the appointment and try someone else.

I would perhaps see him/her again and get a little more information. You could also see another couple for comparison.

zagfles

Yes, be sure to shop around, IFA charges vary considerably judging by peoples' reports here. There are plenty of "greedy" ones, as noted even by IFA's here.

xylophone

Have you and your wife checked on the situation for your state pensions?
Does your wife have any pension provision other than state pension?

The money from the three small pensions has only to see you through to state pension age or are you looking at using them to provide an income supplement for as long as possible?

Are all three DC pensions with no guarantees of any kind attached?

Crocgunnd

My wife has checked her pension forcast to see if she qualifies for a full pension as she took time out for the kids and then worked part time for a while. She's ok on that.
I can't check mine until April next year.
The pension I'm drawing is final salary, but the two company pensions are DC and my personal one is just a small fund which hasn't been paid into for quite a while.
The plan is to draw all the pensions and top up with the surplus from our house sale until pension day.
We want to invest our savings, (15k + a sum from house sale - we won't need it all to live on), to give another income stream. The problem there though as you know is, no one is paying anything worth having which is why I put in about stocks & shares isa's. I'm hoping there are managed funds for this as I don't trust myself to pick my own shares.
As for the guarantees, I've no idea.

xylophone

I can't check mine until April next year.

Why not? You are aged 63/64?

https://www.gov.uk/state-pension-statement

Had you considered a face to face appointment with Pensionwise?

https://www.pensionwise.gov.uk/?gclid=CO7J3P7c0ckCFaEewwodihUHWQ

It might be worth considering transferring the three small pensions into a SIPP if possible - you would be able to take the PCLS and invest the remainder to provide an additional income.

You might choose income units in equity income funds or distribution funds which are a mixture of bonds and equities.

You and your wife might consider opening stocks and shares ISAs with part of the capital released from your house sale.

With regard to holding cash, don't forget the multiple current account option - as a couple you could get over £100,000 (if you wished) into these earning between 3% and 5%.

https://forums.moneysavingexpert.com/discussion/5374614

jem16

Crocgunnd wrote: »

I can't check mine until April next year.

Why? Over 55s have been able to get a state pension forecast from the Future pension centre for around a year now.

The plan is to draw all the pensions and top up with the surplus from our house sale until pension day.

So will you be wanting to utilise Drawdown or an Annuity or are you not sure?

I'm hoping there are managed funds for this as I don't trust myself to pick my own shares.

If you're using an IFA they will pick suitable funds for you. No need to use shares at all.

As for the guarantees, I've no idea.

First of all look up the information you have on your pensions - ie what provider, name of product? It will be useful for you to know.

However if you are using an IFA then he/she should be finding this all out to advise you properly.

Crocgunnd

I'm 63 in January. I've tried a couple of times to get a forcast and I get a message to say I can't get it till April 16.