Am paying 1.7% charges on large investment pot. Is this too high?

Albermarle

I have a pension pot of just over £1m and some other investments.

So really there are two questions .

1) Do you want /need financial advice , or are you willing to try and DIY. This is a never ending debate on this forum so I will not go any further on the topic

2) You want financial advice but want to know if you can get it cheaper and/or change advisor

As said already the cost is on the high side and you should as a first step see if you can negotiate it down by 0.5% or so.

Then the next  question is what are you getting for your money with the IFA. Are you having regular reviews ? Do you feel comfortable dealing with them?  With a Million Pound + pot are potential LTA issues being dealt with/flagged up ? Are you approaching the time to start taking your pension , as this could be a time when the right advice could be more important ?

Prism

There are some people here who DIY that have been doing it a long time and have had great success building their pot up - there are also some who haven't been doing it that long and have yet to experience the hard times. Going DIY on a large pot is not an easy decision and is not always easy to stick to. For a start try and negotiate the advisor fees down, maybe then should it interest you do some reading and consider if you can do it yourself

mattwill

Thanks all. Really appreciate the advice (& the lack of trolls!) on this site.
I did manage my pension myself once and did well but the pot was much smaller. I'm now in my mid fifties and, not being an expert in this, don't want to !!!!!! it up and lose it!  Think I'll try the first step of seeing if Smith & Williamson will reduce their management fee. I like them and they seem honest & straightforward etc but they never contact me and I had to instigate the meeting to say 'I'm in my mid fifties, what are my options'.  

SonOf

Really appreciate the advice (& the lack of trolls!) on this site.
They will no doubt appear shortly.

but they never contact me and I had to instigate the meeting to say 'I'm in my mid fifties, what are my options'.  
It is a regulatory requirement that any business with an ongoing fee to the adviser firm that was set up after Dec 2010 provides a pro-active service where there is a charge for ongoing servicing being made.
HOWEVER, is it possible that you are not on an advised service and that what you are paying is for an own-brand product (or white labelled) using their default funds/portfolio?   
Normally the fees for adviser arranged pensions are split between adviser, product/platform and investment charges. So, three segments.   However, you only split them between two (1% and 0.7%).   This and the lack of pro-active contact may suggest that you are paying 1.7% for a non-advised option (which would then make it even more expensive than indicated)

mattwill

I think S&W use Hays (?) as the pension operator (if that's the right term). Hays did contact me a few months ago about my trigger date. But S&W actively manage the investments, buy & sell funds etc and then there's the fund fees (& transaction fees). Reading your comment I guess S&W must pay Hays a share of their fee to run the pension admin??

Albermarle

But S&W actively manage the investments, buy & sell funds e

Actively managing investments is not the same as regulated financial advice for you personally . It is two different activities.

I think Sonof is correct that if you were paying for financial advice you would at least have annual meetings etc 

I go back to a previous comment- are you aware that a pension pot this size can attract punitive extra taxes ? Has S&W ever mentioned that - maybe not as that would be the domain of personal advice ?

mattwill

Thanks. I managed to lock in a few years ago and so my pot can increase to £1.5m (I wish!). I can't recall the details though.

AnotherJoe

Read this https://theescapeartist.me/2014/06/22/is-your-financial-adviser-screwing-you/

OldMusicGuy

IMO it's outrageously high. I DIY because I can't bear to pay such high fees for something that needn't be complicated. My pot is big, but it's not over 1 million. However, it has taken me five years of reading and learning to get to the point that I am confident to manage such a large pot myself.

If you don't want to DIY there are probably IFAs that would do this a bit cheaper.

Sailtheworld

Just looking at some of the other threads on here (ref new Vanguard SIPP) there are many people jumping over to a new product and saving a few hundred pounds (if that). A few hundred quid isn't to be sniffed at but in the context of this thread we have the OP paying £17k in fees every year. Everyone seems to be suggesting money can be saved but aren't we being a little sanguine so we don't appear impolite?

OP - you're far from an idiot but you're being ripped off left right and centre.