Do you have to have an IFA?

Ptarmigan57

I have a Scottish Widows pension fund of around £300K+ that matures in 2 years. It is managed by an IFA regulated by the FCA. Charges are: to Scottish Widows 0.25% plus 0.14% for Fidelity Platform and 0.50% to the IFA who reviews/adjusts the portfolio quarterly.

I am not at retirement age, but am no longer working so no further funds are being added to this plan.

The IFA has requested that we make different arrangements, moving to a different management platform, and away from Scottish Widows. I have no reason to suspect that anything untoward is happening, but am concerned that I was advised of this with minimal supporting information, and the main justification seems to be the IFA's preferences (which I am sure are well founded).

I have asked for, and received some more information. There is a minimal difference in overall charges.

I do have the option of maintaining the current arrangements with Scottish Widows, but on the basis that the IFA would only review/adjust the portfolio annually.

Is there a "third option" of taking the policy under my own control, direct with Scottish Widows, ie with no IFA in the middle? Does anyone have any experience of this?

Part of my thinking is that while this would effectively freeze the investment choices in the portfolio, I would be avoiding the IFA fees.

xylophone

Do you want to stay with Scottish Widows?

Do you want to manage your own pension and are you confident in so doing?

Will Scottish Widows deal direct with you?

If not, would you wish to consider a transfer to another provider?

How do you plan to access the pension when the time comes?

Will SW offer the options you require?

effectively freeze the investment choices in the portfolio,

Why would this be so?

You could seek an interview with Pension Wise to discuss options.

SonOf

Charges are: to Scottish Widows 0.25% plus 0.14% for Fidelity Platform and 0.50% to the IFA who reviews/adjusts the portfolio quarterly.

Can you clarify that?
Fidelity has nothing to do with Scottish Widows. So, you wouldnt have an SW platform charge plus a Fidelity platform charge.

The IFA has requested that we make different arrangements, moving to a different management platform, and away from Scottish Widows

Understandable recommendation.

I have no reason to suspect that anything untoward is happening, but am concerned that I was advised of this with minimal supporting information, and the main justification seems to be the IFA's preferences (which I am sure are well founded).

What information do you need?
SW's pensions largely geting old in the tooth and can be improved upon elsewhere. There used to be some niches where SW could be good value and some people would compromise their functionality and choice for that value. However, platform pricing has been falling and there is no need to compromise quality with price anymore.

Is there a "third option" of taking the policy under my own control, direct with Scottish Widows, ie with no IFA in the middle? Does anyone have any experience of this?

I believe you put a tied sales rep FA from SW in their place and their charges. So, it's a retrograde step.

art of my thinking is that while this would effectively freeze the investment choices in the portfolio, I would be avoiding the IFA fees.

If you are going to run the portfolio instead and do the rebalancing and fund adjustments then you wont need the IFA.

dmelife

It’s possible that the fidelity platform is being used to hold the assets for a SIPP administrated by SW. There are Standard Life pensions on the Fidelity platform.

beamyup

If your IFA is "adjusting" then you must have multiple shares/funds/etfs all with their own charges. You should definitely consider these as well. Do you have a list of these that you can share?

(unless you have 100% in a low cost fidelity fund which could explain the 0.14% fidelity charge?)

Andrew31

Yes you can manage the portfolio yourself and cut out the IFA. just need to a lot of reading and make sure you dont get it wrong.

I read an article the other day that said not taking advice cost an average of £40,000. But if you feel confident, go for it yourself. You can also fix your breaks on your car.

SonOf

dmelife wrote: »

It’s possible that the fidelity platform is being used to hold the assets for a SIPP administrated by SW. There are Standard Life pensions on the Fidelity platform.

Fidelity used to use Standard Life as their administrator for their pension product before they had their own pension product. Hence why you sometimes see older plans with SL layout from Fidelity. A bit like Cofunds used to use L&G plans or Suffolk Life. However, AFAIA, SW only ever used their own Retirement Account (or PPPs/SHPs if earlier than that) and didn't use third-party platforms (I could be wrong but I have never seen it and don't recall it in their documentation)

bigfer

You can also fix your breaks on your car......
.......and your own teeth.

Malthusian

Andrew31 wrote: »

I read an article the other day that said not taking advice cost an average of £40,000.

It actually said that people who take advice are on average £40,000 better off than people who don't.

This is mainly explained by the fact that there is no point in people with no money paying for advice they can't afford on what to do with their no money.

But a small but significant part of the £40,000 will come from people investing poorly in the likes of Woodford, or giving their money to scams because they think paying for financial advice is a rip-off, or spaffing their money up the wall on cars instead of contributing to a pension because they don't have an adviser playing the part of Jiminy Cricket.

In a good illustration of how journalism works, FT Adviser gets it wrong in the headline (going for the clickbaiting pro-adviser spin) and then in the very first sentence of the article gets it right, once the clicks have been secured.

Andrew31

bigfer wrote: »

You can also fix your breaks on your car......
.......and your own teeth.

:rotfl:

Perhaps we should start a dentisty forum, see how many people are interested.

By the way, i am all for saving money, but somethings should not be done DIY.

bostonerimus

Malthusian wrote: »

It actually said that people who take advice are on average £40,000 better off than people who don't.

This is mainly explained by the fact that there is no point in people with no money paying for advice they can't afford on what to do with their no money.

But a small but significant part of the £40,000 will come from people investing poorly in the likes of Woodford, or giving their money to scams because they think paying for financial advice is a rip-off, or spaffing their money up the wall on cars instead of contributing to a pension because they don't have an adviser playing the part of Jiminy Cricket.

In a good illustration of how journalism works, FT Adviser gets it wrong in the headline (going for the clickbaiting pro-adviser spin) and then in the very first sentence of the article gets it right, once the clicks have been secured.

I'm all for good advice, but I'm even more for good education so people don't need to pay to hand over their financial planning and decisions to a third party.

Things to notice about the article are that he controls on the study are not mentioned and the article is in a trade magazine for financial advisors and involves Royal London...so maybe not the most independent of sources.

I would like to see a comparison of advised individuals and people who follow simple financial rules of thrift and holding inexpensive index trackers or multi-asset funds in ISAs and their pensions.