Approaching 75

Powysshrew

A financial adviser my father has previously used has quoted a fixed fee of £3225 to consolidate the 2 pensions and place them in a drawdown product.

Having spoken on the phone to Aegon, I believe he is able to keep his pension with them in the same product so we have an option not to touch that.

atush

What does he plan for the 400K? To leave it to you/others? if this is the case he could withdraw 100K TFLS and give that to his beneficiaries now to save tax.

Powysshrew

Whatever he doesn't use himself will be shared between my brother and myself.

We are considering the gifting of the lump sum but I would prefer he enjoyed it himself !

jaybeetoo

Powysshrew wrote: »

We have now met with the NFU.....

The drawdown product they offer is in conjunction with Barnett Waddingham.

The charges for advice are:

First £100,000 3.5%
Balance 2%

On top of this there is an initial fee of £250 and an annual fee thereafter of £200.

Therefore, we are looking at a charge of £9,250 in the first year.

To us this seems extortionate!

It is extortionate! Why FAs charge based on a % of the fund value is beyond me. IMHO it should be based on the amount of work they do.

If I take my car for a service they don’t charge me based on a % of the car’s list price!!

Powysshrew

jaybeetoo wrote: »

It is extortionate! Why FAs charge based on a % of the fund value is beyond me. IMHO it should be based on the amount of work they do.

If I take my car for a service they don’t charge me based on a % of the car’s list price!!

Thank you for confirming my thoughts.


I am now going to investigate opening a SIPP with Interactive Investor or Hargreaves Lansdown as they are recommended on the site. Is there any others I should consider ?

FatherAbraham

Powysshrew wrote: »

Thank you for confirming my thoughts.

People make far better decisions when they seek opinions which contradict, not confirm, their own beliefs.

A justifiable reason for linking advice cost to fund size is the liability incurred if the adviser makes a mistake.

ChopperST

Powysshrew wrote: »

A financial adviser my father has previously used has quoted a fixed fee of £3225 to consolidate the 2 pensions and place them in a drawdown product.

Wow - just wow. Well done to you for being on board and helping your father rather than paying these ridiculous fees.

It is probably an hours work at most with some simple form filling. That equates to pay equivalent of a Premier League footballer! If you do require advice look on unbiased.co.uk and find another financial adviser as that FA is robbing your father blind.

Powysshrew

ChopperST wrote: »

Wow - just wow. Well done to you for being on board and helping your father rather than paying these ridiculous fees.

It is probably an hours work at most with some simple form filling. That equates to pay equivalent of a Premier League footballer! If you do require advice look on unbiased.co.uk and find another financial adviser as that FA is robbing your father blind.

Thanks, just trying to help him as much as I can. I have spent hours reading these boards and others trying to work out the best way forward. I appreciate all the advice I have been given.

Malthusian

ChopperST wrote: »

It is probably an hours work at most with some simple form filling.

Absolute rubbish.

At this point advocates of professional advice usually start banging on about research and regulatory requirements, but you're not interested, so I won't.

This thread already contains one example of potentially bad advice which a professional adviser would not have given. If an adviser told a client to take their tax free lump sum and just give it away, and he died within seven years (men aged 75 sometimes do), his heirs could complain to the Ombudsman that the adviser should have recommended a Business Property Relief eligible investment, which would have eliminated the extra IHT from bringing the TFC into the estate after two years. (We don't know whether he has an IHT liability, because no-one has asked, as we're people down the pub.)

An adviser dopey enough to not at least discount that option in their report would be liable for any loss that resulted. People down the pub however are free to say things like "just take the TFC and give it away" and not be liable for it.

If you do require advice look on unbiased.co.uk and find another financial adviser as that FA is robbing your father blind.

No he isn't. If you think that every IFA who charges less than 1% initial is robbing you then you will never find an IFA that isn't cheating you. Even the ones that are willing to quote less than 1% initial will be cheating you in some other way.

On another point raised, fees for financial services (which are not limited to advice, not by a mile) are primarily percentage-based because someone with twice as much money gets twice as much value out of the same service. A person with £100,000 in a fund which makes a 5% return gets £5,000, a person with £50,000 gets only £2,500. Why should the second person pay twice as much for every £ of return as someone twice as rich? They shouldn't, which is why all investment funds charge an annual percentage.