Help on what to do with pension received in divorce settlement

Teejanddeej

Hi,
I've just been awarded 100% of one of my husbands pensions as a result of our divorce. It has to be moved as it's currently in a private company scheme to which I cannot join. I have been to see a financial advisor and he has suggested I invest it, with his help, in a SIPP. The pension pot is worth 300k and he will charge me £6000 as an initial charge and then approx £3000 annually as an ongoing management fee. He says that a good financial advisor should make that money back for me and more.
I'm wondering whether in the long run this is the right thing for me to do or should I just choose a stakeholder pension myself and put it in there?
Would the fees be cheaper? Will I make as much money in a Stakeholder pension? Is this the time for me to be using a FA or should I wait until I'm actually retiring (I'm 57) and then ask for advice? Or should I be actively thinking about where my moneys invested etc now?
Originally I contacted the FA on the advice of the pension company, I think I just wanted some advice as to where to put the pension and I seem to have got caught up in something more like wealth management.
Any advice would be greatly appreciated, right now I can't see the wood for the trees and I'm just so worried about doing the wrong thing.

MallyGirl

If you want to pay for advice then find an Independent financial advisor (IFA) who can use 'whole of market' products.
1% ongoing sounds high - you can probably halve that.

MEM62

As above, avoid FA's and make sure you see an IFA.

campbell19925

Check he is Independant and is registered on the FCA register. That's the first thing to check.

In regards to the fee, 2% upfront is cheap and 1% ongoing is the going rate(if not a little high). Certainly not anything out of the ordinary. Most IFA practices charge 1% per annum for ongoing management and it is beneficial if you have a good adviser.

You should not wait until you retire to "sort anything out". It is better to sort out any issues before you retire, for example, you may be exposed to too much investment risk, you may be paying high charges, you may be in a poor performing fund - in short, there is probably a much more appropriate product out there for you which can improve your circumstances.

No decision is usually a bad decision, and although you need to certainly understand the advice you receive, and agree to it, don't let "being confused" put you off. It's much better to engage now rather than regret in 7/8 years time.

wjr4

Initial fee is too high as a pension sharing order really is not that complicated. Do you have any investment experience? Where are your other pensions (if you have any)? Is it an IFA or FA?

xylophone

https://www.moneysavingexpert.com/savings/cheap-sipps/

https://moneytothemasses.com/saving-for-your-future/pensions/the-best-cheapest-sipps-low-cost-diy-pensions

https://monevator.com/using-vanguard-lifestrategy-funds-life/

https://www.amazon.co.uk/DIY-Pensions-Simple-Retirement-Planning-ebook/dp/B00B7QN8XM

https://monevator.com/vanguard-target-retirement-funds/

https://monevator.com/low-cost-index-trackers/

Above may be worth a read.

Teejanddeej

Thank you all for your answers. He is an Independent Financial Adviser and his company is covered by the FCA. I found them on the Unbiased website. I was impressed with everything he said the first time he came round, I think it's just now that actual fees are being mentioned I'm panicking that I may have got carried away with it the idea of having my money managed for me. It's probably the biggest financial decision I have had to come to on my own so I don't want to mess it up.
I have a final salary plan too and a company pension that I've been paying into for about 5 years. I intend to leave the FS pension where it is and I'm not sure if I could move the other one even if I wanted to as it's a company plan.
My dad lost a large amount of his retirement pot through bad advice 30 years ago and I think that's what worries me.

Brynsam

Ask the IFA why a SIPP is better suited to your needs than a stakeholder plan. You can easily look after the latter without regular ongoing management/advice, meaning you are £3,000 to the good before you start! That said, it would be worthwhile taking advice on which funds to invest in at the outset, and having periodic reviews when you feel the need to do so.

Alternatively, sign up for one year only and then take a view on whether the IFA has lived up to his 'good IFA should easily...' promise. Given the way the markets are flapping around, that is some promise to make.

Finally, are you the sort of person who is easily impressed, especially by someone who is talking about areas you know little about? Much to be said for meeting a second IFA and comparing what each said/proposes to charge.

xylophone

Is it possible to transfer the pension into your current workplace pension?

Teejanddeej

xylophone wrote: »

Is it possible to transfer the pension into your current workplace pension?

I did some research initially and not all pensions will accept a transfer in of such a large pension pot. That's why I decided to get financial advice.

Thrugelmir

Teejanddeej wrote: »

He says that a good financial advisor should make that money back for me and more.

I would take such comments with a pinch of salt. Find another adviser who you are comfortable with and is working in your interests.