IFA setting up a pension

Aegis

fred246 wrote: »

A highly skilled professional person has asked for advice. An IFA comes to see him, asks a few questions and says "I will fill the forms out for you for £3160." Do you not understand that that fee is totally out of proportion for the work done?

Who disagreed with that? I don't think a single person in this thread has argued that the fee is proportionate to or fair for the amount of work being carried out. There may feasibly be other things going on that haven't registered as important, but it sounds like this guy is just trying to line his pockets fast. That certainly doesn't mean every IFA is similar, which just seems like a hasty generalisation.

dunstonh

fred246 wrote: »

A highly skilled professional person has asked for advice. An IFA comes to see him, asks a few questions and says "I will fill the forms out for you for £3160." Do you not understand that that fee is totally out of proportion for the work done?

Two things are out of proportion here.
1 - your assumption on the workload and costs
2 - the size of the fee (which has already been stated multiple times as being too high).

Its a bit leap to then accuse all IFAs of doing the same when clearly they do not.

bostonerimus

There is variation in nature; there are good and bad dentists and good and bad IFAs. If we are comparing dentists and IFAs the I think being a dentist is harder and needs a lot more skill and knowledge and with varying amounts of education basically everyone can do what an IFA does. So it's up to the individual whether or not they take direct responsibility for their finances. I think people should do that in most circumstances as it cuts out a middleman and reduces costs. The thing that does annoy me is the attempt to make managing you money seem overly complicated, but of course there are many vested interests in the financial services industry.

Andymac1987

I don't mean to fan the flames, but as the OP, and as an aside, I might say that this particular IFA was part of a company who specifically aims their services at dentists. He even told me on our first meeting this was "because dentists have a lot of money to invest". It tends to be in all areas, I feel companies set fees higher when dealing with dentists because there's an assumption about our income.

I did get the distinct feeling he was only trying to line his pockets. He also tried to sell me (in addition to other products) a far too excessive professional insurance product (despite me protesting my current one was suitable for me) his commission on that alone being £1.5k.

Due to all your fantastically helpful comments I've done a lot more reading in to investing and finance in general, and feel confident in setting up a Vanguard Retirement Fund account. I am also looking and transferring some funds (currently doing absolutely nothing in a savings account) in to an investment ISA (only recently learnt about due to all this). I really don't know why I've never done so before but the point is I'm excited about being in control of my own finances rather than letting someone else profit from my ignorance. This isn't to say I won't ask the help of an IFA in future if my situation changes, and greatly value their guidance.

My final concern now is how dealings will be left with the IFA. I've sent an email saying I've decided not to proceed, after feeling it's not suitable and finding his fees in a small table within the 20 or so papers he left (didn't even tell me his fee). I hoped as I've not signed or agreed anything I can't be held accountable for any fees. (Would happily remediate a professional for their time if they'd not just come up with one multi asset fund)

Many thanks to you all again.

dunstonh

and feel confident in setting up a Vanguard Retirement Fund account.

That's fine. However, it doesnt fit most people in the UK. i.e. it starts higher than the average consumer's risk tolerance and finishes lower than the average consumers risk tolerance. it is also more expensive than the non-lifestyle risk adjusting version. So, are you sure it fits you?

Would happily remediate a professional for their time if they'd not just come up with one multi asset fund

Realistically, until you get into or close to 6 digits, it really isnt worth going into a bespoke portfolio. So, a multi-asset fund does make sense at the start.

bostonerimus

Andymac1987 wrote: »

My final concern now is how dealings will be left with the IFA. I've sent an email saying I've decided not to proceed, after feeling it's not suitable and finding his fees in a small table within the 20 or so papers he left (didn't even tell me his fee). I hoped as I've not signed or agreed anything I can't be held accountable for any fees. (Would happily remediate a professional for their time if they'd not just come up with one multi asset fund)

Many thanks to you all again.

Don't lose any sleep. You don't owe this IFA anything. He has to use his time to get clients and that's his cost of doing business. In your case you listened to his pitch and decided it wasn't for you.

zagfles

bostonerimus wrote: »

There is variation in nature; there are good and bad dentists and good and bad IFAs. If we are comparing dentists and IFAs the I think being a dentist is harder and needs a lot more skill and knowledge and with varying amounts of education basically everyone can do what an IFA does. So it's up to the individual whether or not they take direct responsibility for their finances. I think people should do that in most circumstances as it cuts out a middleman and reduces costs. The thing that does annoy me is the attempt to make managing you money seem overly complicated, but of course there are many vested interests in the financial services industry.

Indeed - or that they have some magic secret knowledge that enables them to outperform top fund managers, but of course don't provide any evidence...

bostonerimus

Andymac1987 wrote: »

Due to all your fantastically helpful comments I've done a lot more reading in to investing and finance in general, and feel confident in setting up a Vanguard Retirement Fund account. I am also looking and transferring some funds (currently doing absolutely nothing in a savings account) in to an investment ISA (only recently learnt about due to all this). I really don't know why I've never done so before but the point is I'm excited about being in control of my own finances rather than letting someone else profit from my ignorance. This isn't to say I won't ask the help of an IFA in future if my situation changes, and greatly value their guidance.

.

A Vanguard ISA is a sensible way to go as long as you are ok with just buying Vanguard funds. I think that's more than enough, but many people want to option to buy other funds too.

You should also look into a pension plan, maybe a SIPP. Vanguard will be starting one of these at the end of 2018, but there are plenty of other providers already.

zagfles

Andymac1987 wrote: »

I don't mean to fan the flames, but as the OP, and as an aside, I might say that this particular IFA was part of a company who specifically aims their services at dentists. He even told me on our first meeting this was "because dentists have a lot of money to invest". It tends to be in all areas, I feel companies set fees higher when dealing with dentists because there's an assumption about our income.

I did get the distinct feeling he was only trying to line his pockets. He also tried to sell me (in addition to other products) a far too excessive professional insurance product (despite me protesting my current one was suitable for me) his commission on that alone being £1.5k.

At least this rip-off merchant has got you interested in your own finances, which perhaps wouldn't have happened if the charges were reasonable!

Due to all your fantastically helpful comments I've done a lot more reading in to investing and finance in general, and feel confident in setting up a Vanguard Retirement Fund account. I am also looking and transferring some funds (currently doing absolutely nothing in a savings account) in to an investment ISA (only recently learnt about due to all this). I really don't know why I've never done so before but the point is I'm excited about being in control of my own finances rather than letting someone else profit from my ignorance. This isn't to say I won't ask the help of an IFA in future if my situation changes, and greatly value their guidance.

You can always pay for one-off advice if you ever need it. But you'll probably find you don't once you get into it. I really enjoy managing my finances. I'm sure if I described my strategy it'd get sneered at, but it's done very well over the last 20+ years once I'd moved away from rubbish with-profits funds.

My final concern now is how dealings will be left with the IFA. I've sent an email saying I've decided not to proceed, after feeling it's not suitable and finding his fees in a small table within the 20 or so papers he left (didn't even tell me his fee). I hoped as I've not signed or agreed anything I can't be held accountable for any fees. (Would happily remediate a professional for their time if they'd not just come up with one multi asset fund)

Many thanks to you all again.

No problem - and there's loads of so-called "DIY" investors on the Savings & Investments board (this board is more specifically pensions issues) so post there if you have any investment related queries, or here for anything specifically pension related.

atush

fred246 wrote: »

A highly skilled professional person has asked for advice. An IFA comes to see him, asks a few questions and says "I will fill the forms out for you for £3160." Do you not understand that that fee is totally out of proportion for the work done?

Dont be ridiculous.

Everyone here incl the IFAs said the cost was too high.