SIPP: Do I need a FA

louchasal

Last September I tranferred my Final Salary Pension via a CETV in to a SIPP with AJ Bell. As by law I had to pay a FA to apporove this (13K). I have now the entire fund invested with Quilter Cheviot whom Ive had a long relationship. I have a fund manager who deals with these investments. I am in work and are not likely to retire for 4 years. My question is as there is of course a fee for the investment manager I am beginning to think that there is no need for the ongoing fee for a FA, as far as I can see the FA is basically doing nothing at the moment and during the recent volitlity in the market the investment manager has been keeping me up to date and Ive heard nothing from the FA. My question is am I expecting to much and or should I consider until nearer my retirement severing my FA advise?

Brynsam

Ask the SIPP provider if you can deal direct with them.

Ask your financial adviser what value he's adding.

dunstonh

My question is as there is of course a fee for the investment manager I am beginning to think that there is no need for the ongoing fee for a FA, as far as I can see the FA is basically doing nothing at the moment and during the recent volitlity in the market the investment manager has been keeping me up to date and Ive heard nothing from the FA.

Why would the FA be doing anything in that period?

My question is am I expecting to much and or should I consider until nearer my retirement severing my FA advise?

The FA has nothing to do with the day to day running of the investments. The FA is there to ensure the investments are suitable but that shouldnt have changed between September and now. There may be communication going on between the FA and the DFM behind the scenes. Depending on the investment strategy being followed. For example, the model portfolios we use are available on DFM and advisory basis (most people go with advisory as its cheaper). The adviser is responsible for the investment recommendation but the DFM holds the regulatory permissions to trade on a discretionary basis. Whereas on advisory basis, you tend to update, rebalance and adjust at the review date.

Other DFM styles see the FA pass the complete process to the DFM.

So, it really depends on what style is being used. Also, the provider may not deal direct with consumer without adding a charge of their own. IF you want to DIY, you may need to transfer to a DIY pension provider.

whatsup7

Good question, I am in a similar position and wonder why I need to pay a financial advisor.

bostonerimus

If you have a well designed asset allocation, some knowledge and the fortitude to manage your own money through ups and downs then I see no reason to use an FA or IFA. It's not difficult, but you must not do silly things. I invest directly with Vanguard in the US and manage my own money saving myself a lot in fees. I don't do anything very complicated, but that's often a good thing when it comes to investing.

50Twuncle

We are in a similar position - we have our life savings with QC and pay a FA about 1.5% which, to me looks like poor value - QC take the same amount

Should we dump the FA ?

Linton

50Twuncle wrote: »

We are in a similar position - we have our life savings with QC and pay a FA about 1.5% which, to me looks like poor value - QC take the same amount

Should we dump the FA ?

- [STRIKE]By QC do you mean QC Financial Management from Newport? They are the only relevent match from Google. If so they are IFA's rather than FAs.[/STRIKE]
- What does the 1.5% cover - just IFA annual fees or does it include platform and fund charges?
- I am confused that you appear to say you pay the FA and QC 1.5% each making 3% in total. Is that right? If so why pay both and what for? I thought QC was the IFA.
- How much in your pot? 1.5% of £10K is peanuts, 1.5% of £500K is very high.


PS: I have just seen Quilter Cheviot mentioned in the OP. They appear to be seriously high end international investment managers. Are you buying your financial advice from Fortnum & Masons when Lidl's would have done perfectly well? Is your FA an FA or an IFA?

dunstonh

We are in a similar position - we have our life savings with QC and pay a FA about 1.5% which, to me looks like poor value - QC take the same amount

Are you sure the FA is taking 1.5%?

You expect 1% on small values and 0.5%, which is the dominant figure, on larger values. 1.5% sounds more like total charges rather than FA charge.

And you should be using an IFA not an FA.

segovia

Did you dump your IFA / FA?

1.5% IFA/IF charge is very high, di you check it ?

atush

50Twuncle wrote: »

We are in a similar position - we have our life savings with QC and pay a FA about 1.5% which, to me looks like poor value - QC take the same amount

Should we dump the FA ?

3% is high, i'd be dumping both.

jimi_man

It's shame that people post these questions and then never bother coming back to see the answers. I'd love to know a bit more about the circumstances.