Ongoing IFA Charge & Fees

segovia

Hi

I have engaged an IFA to look at my personal pensions and I am reviewing their recommendations.

Regarding charges, initial fees to move my pensions and my wife's PPP's to a SIPP is £3K and 0.5%+vat ongoing.

Is this about industry average?

S

[Deleted User]

Out of interest why a SIPP - why not use the IFAs platform (if it is available). My IFA offers portfolios and a platform (fee for platform is 0.25%, his fee ranges from £1.6k-£2.5k or any time access and access to alternative portfolios for 1%)

segovia

Deleted_User wrote: »

Out of interest why a SIPP - why not use the IFAs platform (if it is available). My IFA offers portfolios and a platform (fee for platform is 0.25%, his fee ranges from £1.6k-£2.5k or any time access and access to alternative portfolios for 1%)

The SIPP is to prepare for drawdown which will be initiated for one of us in the next 4 years

S

HappyHarry

segovia wrote: »

Hi

I have engaged an IFA to look at my personal pensions and I am reviewing their recommendations.

Regarding charges, initial fees to move my pensions and my wife's PPP's to a SIPP is £3K and 0.5%+vat ongoing.

Is this about industry average?

S

The value of the initial fee of £3k will depend on the value of your pensions. If they are valued at £50,000 then it's expensive, if they are valued at £1,000,000 then it's not. Your location also pays a part, advice in the North West tends to be less expensive than advice in London.

0.5% as an ongoing fee is common. Again, it depends on location and value of your pensions. However, a VAT charge is unusual, as ongoing advice relating to suitability of investments/pensions is exempt from VAT.

[Deleted User]

segovia wrote: »

The SIPP is to prepare for drawdown which will be initiated for one of us in the next 4 years

S

My IFA has a platform that does that - I thought they all did.

segovia

HappyHarry wrote: »

The value of the initial fee of £3k will depend on the value of your pensions. If they are valued at £50,000 then it's expensive, if they are valued at £1,000,000 then it's not. Your location also pays a part, advice in the North West tends to be less expensive than advice in London.

0.5% as an ongoing fee is common. Again, it depends on location and value of your pensions. However, a VAT charge is unusual, as ongoing advice relating to suitability of investments/pensions is exempt from VAT.

Total value appx £400K, I queried the vat and as the IFA's fees are being taken directly from the fund it incurs VAT as opposed to me paying the fees directly.

fred246

0.5% ongoing is actually an outrageous amount. Someone on here was saying they pay £1750 for a £350k pension. The money is invested in long term investments. All it needs is a check up. My hairdresser comes to my house and not only checks my hair she actually cuts it for under £10. She has business expenses too. How can anyone justify £1750?. How many hours does it take an IFA to look at a portfolio? Total rip off.

HappyHarry

segovia wrote: »

Total value appx £400K, I queried the vat and as the IFA's fees are being taken directly from the fund it incurs VAT as opposed to me paying the fees directly.

That doesn't make any difference.

If the fee is in relation to advice on a retail product, it's exempt from VAT. Do you have any idea as to what the adviser may be recommending?

segovia

fred246 wrote: »

0.5% ongoing is actually an outrageous amount. Someone on here was saying they pay £1750 for a £350k pension. The money is invested in long term investments. All it needs is a check up. My hairdresser comes to my house and not only checks my hair she actually cuts it for under £10. She has business expenses too. How can anyone justify £1750?. How many hours does it take an IFA to look at a portfolio? Total rip off.

I agree it seems a but I also believe it is the industry norm for ongoing IFA advice.

HappyHarry

fred246 wrote: »

0.5% ongoing is actually an outrageous amount. Someone on here was saying they pay £1750 for a £350k pension. The money is invested in long term investments. All it needs is a check up. My hairdresser comes to my house and not only checks my hair she actually cuts it for under £10. She has business expenses too. How can anyone justify £1750?. How many hours does it take an IFA to look at a portfolio? Total rip off.

OP, if you don't know, fred246 is one of our resident trolls. Hates financial advisers and garages. Usually best to ignore their posts.

segovia

HappyHarry wrote: »

That doesn't make any difference.

If the fee is in relation to advice on a retail product, it's exempt from VAT. Do you have any idea as to what the adviser may be recommending?

Quote from the IFA's

"The fund is a service that plugs into your SIPP as your funds are now being continuously and independently discretionary managed. By virtue of it being a service, it becomes vatable."