Do I have to pay a pension yearly ongoing fee to my IFA?

johnjo569 · 14 December 2018 at 11:09AM

Hi, As the title states, I was wondering whether I HAVE TO pay a yearly ongoing management fee to my IFA for my pension?

I currently have a £200,00 plus pension pot that I have had with the same pension provider for 6 years. My IFA helped me to set this up and I was very happy with his help. Its tinkering along nicely and i am happy to keep things as they are. If in the future I decide to say, lower my risk level, I will be happy to get him to do this for me.

My problem is I have a yearly ongoing management arrangement fee with him set at 0.4%. When I first set this up it seemed reasonable but over the years I have realised I barely need him, if at all. I can go online anytime and see how my pension is performing. That yearly review lasts all of 1 hour and for that I have worked out it costs over £800.00 based on 0.4%!!! Thats £800.00 an hour or worst case scenario if i change my pots around slightly its 2 hours work, thats still £400 per hour!! Times that by 10 years and its up to £8000.00 in management fees, it feels like a ripoff, a scam. I know its not and 0.4% is about average but even so where else can you get those figures except becoming a pro footballer!

I would like to have a fee based assessment where I can choose when I want it and save myself a lot of money in the process.

Can I do this? Can I tell my IFA I no longer want the ongoing pension management relationship based on a percentage charge. Can I cancel this arrangement? If he isnt open to a fee based arrangement can I find somebody else who is?

Fairs fair, we all have to earn money but I really don't feel I am getting value for money, £800+ for 1 hours work seems extreme.

If anybody has any experience with this it would be much appreciated.

Ps. I do like my IFA he's a nice guy I just starting totting up my yearly outgoings and thought... WOW that's a lot... even if its a couple of hours work!!