IFA changed our pension scheme and raked in a fresh load of commission

m_c_s

Ed soon to be an IFA.....

ps I think they are related ..with all the disagreements... husband and wife perhaps?

EdInvestor

Ed soon to be an IFA.....

ps I think they are related ..with all the disagreements... husband and wife perhaps?

:rotfl::rotfl:

robp

Why not suggest that the company arrange for the IFA to give a presentation for staff to demonstrate mathematically why the change is a good one?

He/She could view this as a marketing and goodwill opportunity....you would have a chance to ask some questions.

dunstonh

A few years back, the FSA released a publication referred to as OP18 or to give it the written name "To switch or not to switch". It was seen as setting the criteria for pension transfers. There was another OP as well which followed although the number escapes me at present.

Basically, these FSA documents encouraged IFAs to make pension transfers when it is in the best interests to do so. Indeed, with a serviced contract (such as a group PPP), the IFA has an obligation to ensure the product is still suitable and recommend changes when necessary.

....seeing as the same IFA set up the original scheme, if he later decided it was no good, surely he's guilty of misselling?

When you buy products, they go out of date or become obsolete because better products come along. Pensions have changed massively over the years. You had the stakeholder and introduction of mono charged personal pensions 7-8 years ago. Since the rule changes in April 2006 (A-day) there has been a new generation of pension products come out to reflect these options. Plus, we have had an increasing number of providers move towards factory gate pricing with regular contributions where the commissions are stripped off the annual management charge and the cost of advice/administration is paid for explicitly out of the premiums in the first [upto] 36 months allowing the amc to remain low at levels around 0.4%. That can save many thousands of pounds over the long run and the pension is a long term. With these, the insurance company no longer pockets the extra annual managment charge after the adviser has been paid.

moonbeaver

I've looked into this further now, I've been told that the old scheme and the new scheme are much the same thing.

I've also been advised that there are grounds for a complaint - I've put all the information into an email and sent it to the IFA's compliance officer, who is looking into it.

In the meantime, here's an interesting article from last year, which I definitely think is relevant:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/03/08/cmsell08.xml

"Consumers are being warned to be on their guard against "commission hungry'' financial advisers amid mounting evidence that sharp practice is returning to the market as firms come under intense financial pressure. "

"Industry executives also allege that churning - moving an individual's investments or group pension business from one company to another simply to earn commission - is rife."

EdInvestor

moonbeaver wrote: »

I've looked into this further now, I've been told that the old scheme and the new scheme are much the same thing.

Still can't comment in the absence of any detail.

I've also been advised that there are grounds for a complaint - I've put all the information into an email and sent it to the IFA's compliance officer, who is looking into it.

Why not post it here as well?

dunstonh

which I definitely think is relevant:

So, an article in a newspaper commenting on a minority event is relevant?

What about the FSA OP18 which encourages transfers to take place when justified?

Leaving someone in a duff plan and not putting them into a better modern alternative when it is in their best interests is also a claimable event. It doesn't matter if the adviser earns from it or not.

A bit like when you are sold a TV and then years later you buy another with a bigger screen, then again years later with a widescreen, then plasma then HD etc. Each time the retailers earns from it.

I've also been advised that there are grounds for a complaint - I've put all the information into an email and sent it to the IFA's compliance officer, who is looking into it.

Who advised you?

Considering you appear to know nothing about the old plan and the new plan and were unable to compare them, how can any judgement be made?

It could be a mis-sale but you have given nothing to suggest it is.

Going straight to complaint without even asking for the justification first is nasty and vindictive. Complaints are filed on the advisers record regardless of outcome. If the recommendation is justified then you have created a record for that adviser for no good reason.

payless

I obviously don't know all the facts .. but a few questions to consider

1. Do you make personal contribution

2. Why was it after the first statement you discovered the commission.. did you not recieve a pre sale illustration

3. Did no consultation with staff take place ?

we realised 25% of first year payments into the 'new' pension had been taken as commission by the IFA

4. Just because pension company paying 25% commission , does not mean that it comes out as 25% of your first years contribution - is this what the illustration implies.

5. Did you get individual " About our services" / IDD ... were IFA they offering advice to individuals anyway

Dithering_Dad

m_c_s wrote: »

Ed soon to be an IFA.....

ps I think they are related ..with all the disagreements... husband and wife perhaps?

lol, I always imagine them as those lovable and curmudgeonly old men (Statler & Waldorf), who sit in the private booth on the muppet show. :rotfl:

Great to have them on here though, I for one have been given quality suggestions by both.

payless

so which is which