IFA has changed company, wants me to go with him

goodmorrow

I'm hoping some-one can give me advice on the correct course of action.

I live in the UK and am retired. I have had investments for some years, with an Independent Financial Adviser (IFA) from Bellpenny. The investments seem to have performed well – my total capital invested has increased over the years, despite my having taken a fairly good income from it via draw-down, and not having added to it.

A few weeks ago my IFA rang me, in a mood that seemed to approach panic, to say that he and many other IFAs were leaving because Bellpenny was about to merge with another company. He urged me to move with him, to remain a client of his, not of Bellpenny.

I wasn't sure what to do, so I did nothing, and Bellpenny appointed a new IFA for me. I met him recently, just an introductory meeting, though we did agree some minor changes.

Yesterday my former IFA rang me, and said the merger had now gone ahead. He seemed to regard this as a step towards disaster, and he took it for granted I would now come over to him and the company he has just joined. He was shocked when I said I was happy to stay where I was. To gain time to think, I said please ring me again in a couple of days.

I'm no expert on the norms and customs of the finance world – I rely on my IFA to advise me. But now I have to choose between IFAs. Is it normal for my original adviser to approach me in this way? Does anyone regard Bellpenny's recent merger as a step towards disaster, as he seems to?

Keep_pedalling

We were in the same situation a 5 years ago when my IFA left his company to set up on his own. As all our dealing were with him personally, and we were perfectly happy with what he was doing for us we moved with him and are still with him.

He however gave us plenty of notiice and did not apply any pressure to make the change, so if you are unhappy about the way he has gone about this perhaps it is time to move on.

jimjames

Maybe it's a step towards disaster for him but if nothing changes for you and charges/investments remain the same then I can't see a problem.
Just be very wary if they start to recommend changing your investments to gain fees for themselves.

ColdIron

Out of curiosity, is your old IFA now a partner for St. James's Place?

goodmorrow

I think he has joined Total Wealth Management.

My charges with Bellpenny seem to be remaining at 1% per year, or 3% if I invest more money, which I'm not. The recent changes were just to move some existing money into an ISA and (at my request) to increase my monthly income from the investments.

bostonerimus

If you can reduce your costs from 1% maybe you should consider moving.......I continue to be amazed that people will spend 25% of a standard drawdown income estimate on advisers

bigadaj

goodmorrow wrote: »

I think he has joined Total Wealth Management.

My charges with Bellpenny seem to be remaining at 1% per year, or 3% if I invest more money, which I'm not. The recent changes were just to move some existing money into an ISA and (at my request) to increase my monthly income from the investments.

It's important you're comfortable with your adviser but costs certainly come into it as well.

Depending on the size of your pot then assuming it's six figures then you'd expect your advisers charges to be around 0.5%, in addition to maybe 0.25% platform charge and maybe an average of 0.5% fund charges.

Keep_pedalling

The 3% for additional monies is a bit rich, I don't pay anything for adding new money.

AnotherJoe

goodmorrow wrote: »

I think he has joined Total Wealth Management.

My charges with Bellpenny seem to be remaining at 1% per year, or 3% if I invest more money, which I'm not. The recent changes were just to move some existing money into an ISA and (at my request) to increase my monthly income from the investments.

Outrageous. There should either be no cost or a small fixed transaction fee. It doesn't cost any more to add ten thousand than one thousand and there's no justication for reducing your additional money. Your ongoing fees should cover the larger pot. So that means in year one you lose 4% on what you added !

bostonerimus

bigadaj wrote: »

It's important you're comfortable with your adviser but costs certainly come into it as well.

Depending on the size of your pot then assuming it's six figures then you'd expect your advisers charges to be around 0.5%, in addition to maybe 0.25% platform charge and maybe an average of 0.5% fund charges.

So 1.25%.....that's a massive drag on a portfolio...get rid of the IFA and use trackers and maybe you can get the costs to less than 0.5%, which is still high IMHO.. The UK needs some serious changes, not least being the investor's attitude towards charges.

The post from Bellpenny is interesting. My initial thoughts were that there must be rules against taking clients from one company to another if an IFA moves.

aroominyork

goodmorrow wrote: »

3% if I invest more money

Everything is negotiable. The IFA I recently left wanted 3% on new investments; we agreed 1% but I reckon even that is questionable since they will get annual fees on the money in future years.