Appointment with IFA coming up, should i

oysterman

have concerns?


Morning people, a brief history. 2 years ago i had meeting's with 2 different IFA's regarding various pension pot's i had. Not being pension savvy i wanted to know if i should be consolidating the pot's or leaving them alone. They both came back with the same answer, that they were ok & i would'nt gain by consolidating them.


I received a letter before xmas from a one of the firm's, but not the same advisor saying would i like a review. Had a brief phone conversation with him & arranged a meeting at my house. The main thing i'm concerned with is, he is now talking about consolidating some of my pension's. Obviously it would be my decission to go ahead with any of his advice, but should i be wary.
cheers for any replies

OldMusicGuy

You should do some reading and understand what type of pensions you have. If these are defined contribution pensions, you may not need an IFA to consolidate them if that's what you want to do. I consolidated six pensions together myself and it cost nothing.

You need to look at your existing pension scheme documentation to find out what type of pensions they are, if they have any conditions attached to them that might impact consolidating them (for example, you might lose valuable benefits from the existing pension scheme like a guaranteed annuity rate).

You also need to understand (if you don't already) how DC pensions work. These have two elements, the pension platform and the funds in which you money is invested. It's the investment choices that dictate how your pensions perform. Thus consolidating them doesn't mean they will do any better. They might even do worse if they are invested differently.

Consolidating DC pensions doesn't give you any advantage apart from ease of administration (everything in one place) and maybe more choices about how you can invest the money, together with more flexibility in drawdown. For example, some older DC pensions have a limited choice of funds and don't allow flexible drawdown. That might sound bad, but then they may well be lower cost, and you might not choose a different style of investment when you move.

I did consolidate all mine because I wanted to manage everything together on a platform with a wide range of investment choices.

If your pensions are defined benefit pensions, then you must seek IFA advice if you want to transfer them. That is a very different choice to make (and one that I personally would be very wary of).

You should read up on all of this stuff BEFORE you meet with the IFA. That way you will be able to have a more informed discussion with them. If you need it, there's good basic information here https://www.moneyadviceservice.org.uk/en# under the "Retirement" tab and also here: https://www.pensionwise.gov.uk/en

dunstonh

The main thing i'm concerned with is, he is now talking about consolidating some of my pension's.

Not unexpected. Costs have continued to fall and what may have been marginal once before may be viable now.

If the adviser is employed on an ongoing basis then usually transactions such as provider change are carried out with no initial charge/switching charge (as its part of the ongoing service).

but should i be wary.

Seeing as you have given us very little to go on, it is hard to comment on that.

Albermarle

Depending on the amounts involved , it can be that putting all your funds with one pension provider will result in a discount.
Often ( although each provider will be different ) any pot > £50K sometimes gets a discount and then > £250K & £500K there can be more discounts .
However to repeat what has already been said , the pension provider is only the administrative framework and your money is actually invested in funds ( normally) . With some pension providers you can only invest in a restricted number of funds and with others you have a wider choice. However if you are not a very active investor this does not matter that much .

squirrelpie

Had a brief phone conversation with him & arranged a meeting at my house. The main thing i'm concerned with is, he is now talking about consolidating some of my pension's. Obviously it would be my decission to go ahead with any of his advice, but should i be wary.

I would say have the meeting by all means but do not agree or sign anything at the meeting. Say you need to sleep on it. Then you can think about it it and if you wish, post details of any proposals on here for comment.

BLB53

The main thing i'm concerned with is, he is now talking about consolidating some of my pension's. Obviously it would be my decission to go ahead with any of his advice, but should i be wary.

So obviously ask him what has changed in the past couple of years which makes him think the advice from the other two is no longer appropriate for your situation.

What ball park figures are involved?

greenglide

Have you checked to ensure that he / his firm is Independent? Just because he / they were independent doesn't mean he / they still are.

oysterman

BLB53 wrote: »

So obviously ask him what has changed in the past couple of years which makes him think the advice from the other two is no longer appropriate for your situation.

What ball park figures are involved?

That will be the first question i ask. At a rough guess, the penson pot's toatal about £150,000

oysterman

dunstonh wrote: »

Not unexpected. Costs have continued to fall and what may have been marginal once before may be viable now.

If the adviser is employed on an ongoing basis then usually transactions such as provider change are carried out with no initial charge/switching charge (as its part of the ongoing service).



Seeing as you have given us very little to go on, it is hard to comment on that.

What info do you require to comment further?

Albermarle

You should also be aware that if these are simple DC pots, then combining them is easy to do yourself.
If you are lacking in investment knowledge/confidence then an IFA can help you with the investment fund choices, either as a one off or on an ongoing basis. In this case the IFA charge could be worth it.
However if they try and charge you a lot for the actual transfer/consolidation then be aware it is normally something you can do yourself or zero cost.