Multiple LoA for IFA selection

worlestone

I'm in the process of meeting with three IFAs, as advised, to find an IFA and pension investment plan suitable.

Having just met with the second IFA, of course they require a signed letter of authority to ask details about my pension. Is this normal practice, what I mean is will the pension company (Aegon) mind that they have been asked for the same information again, and will be a third time. Or should I be making a decision on which IFA based on an initial meeting without the need for a proposal/report?

Also, one of the advisers is with Hargreaves Lansdown, so an FA rather than an IFA, should that make a difference? We are asking all about their managed investments

Thanks

dunstonh

Having just met with the second IFA, of course they require a signed letter of authority to ask details about my pension. Is this normal practice,

I always get them on first visit. Otherwise you end up with a second visit still without the information and needing a third visit after you ahve the information and then a 4th visit to present recommendations.

what I mean is will the pension company (Aegon) mind that they have been asked for the same information again, and will be a third time.

No. However, it can create issues if all three post them in at similar times as the latest one being dealt with supercedes the earlier one. So, the agency team may allocate the policy to IFA 1 and then pass the request to the servicing team to deal with (sitting in queue for a few days). In the meantime IFA 2 could send theirs in. The agency team change the agency to IFA 2 and pass it to servicing. When the servicing team get round to giving IFA 1 the info, they will see that the policy is not on that agency (as its on IFA 2 by that time) and reject the request.

Or should I be making a decision on which IFA based on an initial meeting without the need for a proposal/report?

You are not going to get any proposal or report from an IFA without committing to advice and fee.

Also, one of the advisers is with Hargreaves Lansdown, so an FA rather than an IFA, should that make a difference?

Restricted FAs have restrictions on what they can offer or whose products and investments they offer. Some can be restricted right down to own range. Others may restrict very little. Only an IFA is true whole of market. General rule of thumb is to stick to IFAs and avoid FAs. Firms that have started with minimal restrictions tend to have mission creep and find within a few years that the restriction list gets longer. Panels start coming in and all advisers in that firm have to use the same process and in the end the client has to fit the adviser rather than the adviser fitting the client.

Generally, smaller local IFAs are usually more desirable if you want a personal long term business relationship with the same adviser. Larger firms have higher staff turnover. Larger firms (regionals and nationals) tend to have those earlier in their career path who are not ready yet to set up their own firm or be a partner/director in an existing one. So, chances are you would get new advisers dealing with you every few years. Whereas getting in with a director/partner/owner of a local firm pretty much means they are going to be your adviser until the end (if they are 65 then that may not be much longer! but if they are younger than you, then you should have long enough).

There is also commitment. Employee advisers typically work to their contract of employment. Local firm advisers work as needed. Including emails at 11pm on a Saturday.

So, its not just the adviser themselves you need to consider. It is the model they operate under. The term IFA covers different models. So, don't assume they are all the same.

Paul_Herring

No. However, it can create issues if all three post them in at similar times as the latest one being dealt with supercedes the earlier one.

So how should visits to multiple IFA's be done - spread them out a bit?

worlestone

Thank you for the points to consider, there are things I'd not considered

dunstonh

So how should visits to multiple IFA's be done - spread them out a bit?

Tell them to leave their LOA as you want to think about it and if that adviser is employed you will sign the form and post it or drop it in to that IFA.

Rural firms can operate very differently to city firms too. There may be a community side to rural firms whereas city firms may be more "professional" or formal in their approach. Some people prefer one method or the other. Often, its not about the advice (which in most cases will be a variation of a theme. It is about trust, communication and availability.

wjr4

Or get the letter of authority based on 'information only' and not 'change of servicing agent' - problem solved.

dunstonh

wjr4 wrote: »

Or get the letter of authority based on 'information only' and not 'change of servicing agent' - problem solved.

Funnily enough, that method is actually used by scammers to avoid the current adviser on the agency from being tipped off. Although some providers do notify the current adviser when they get that request.

It doesnt necessarily get around the problem though. For example, if an Aviva plan is on the agency, the adviser can get all the detail online. Aegon is notoriously slow for paper requests but online is instant and you only need a much shorter list of things to fill the gaps. Std Life are hit and miss as to what they supply. You ask, they dont tell you everything but their online site gives the rest.

It will solve the issue with many providers but could cause other issues with some. Its also not that helpful for adviser firms running integrated software with providers.