Am I being ripped off?

garmeg

Blackbeard_of_Perranporth said:

I pay my FA about £3,000 every year and take myself on a decent holiday!

I do my investments myself, buying funds I have researched. This are funds, where a manger does the leg work on the investments. That is what they are paid for! Mty spread is overt 8 funds in total, with their performance running at around 4.5% for my ISA and SIPP is around 8% over three years. Funds range ion the last three months from +9% to a loss -5%. Since the bang of March 2020, I have regained ground, now a loss of just £1,300 this year since March. But year on year, still good!

What funds have you got? No need for amounts, just interested in the actual funds. Thanks.

Albermarle

Investor67 said:

No I don't think the annual review service is worth it.  Pot is 450k so he receives over 3k annually. He does not manage anything. I am clueless about pensions so the full blown DIY route would not be a good idea for me. I would like to transfer out of RL into another pension plan and pay a fixed fee for annual reviews. In the meantime, I will educate myself!

This does not quite make sense. You want to dump the current advisor as you do not think you get value for money .
Then you want to move out of current RL plan and move it another one , although you say I am clueless about pensions .
Then pay a fixed fee for an annual review . The fixed fee will probably not be that much less than you are paying now as each review will probably be treated as a new review . So back to square one . Your options are probably 
1) Stick with current IFA but ask them to reduce the charge to 0.5% and that you want to review their recommendation of the RL funds. Or get a new IFA on similar terms .
2) DIY
I do not think some kind of half way house between the two is practical 

atush

i dont think 0.75% is the going rate, more like .5%.

But it depends on pot size really.

Blackbeard_of_Perranporth

garmeg said:

Blackbeard_of_Perranporth said:

I pay my FA about £3,000 every year and take myself on a decent holiday!

I do my investments myself, buying funds I have researched. This are funds, where a manger does the leg work on the investments. That is what they are paid for! Mty spread is overt 8 funds in total, with their performance running at around 4.5% for my ISA and SIPP is around 8% over three years. Funds range ion the last three months from +9% to a loss -5%. Since the bang of March 2020, I have regained ground, now a loss of just £1,300 this year since March. But year on year, still good!

What funds have you got? No need for amounts, just interested in the actual funds. Thanks.

I use a Fidelity SIPP. It has two growth funds, global equity and a U.K. futures. Runs at 50:50, but varies between 45:55! I never pay an IFA thief to rebalance. It has run like this for ten years!

ISA pot is 6 funds. Across global fund, uk equity and high yield!  Uk equity is poor, high yield! Oops. But emerging markets is running high, but balance is good. Pots are within about 20% of each other, though worse one is low! It could have been a tad better this year.

Monthly I make a deposit of sorts, and spread, or just pick one fund, depending on recent performance or market.

Then I rely on the fund manager to make my money grow, that is what he is paid to do. Why do I need another IFA to advise me.

Also expect losses. In March, I reacted early and have regained ground, down marginally by about £1,500. It could had been a lot worse!

dunstonh

Albermarle said:

Investor67 said:

No I don't think the annual review service is worth it.  Pot is 450k so he receives over 3k annually. He does not manage anything. I am clueless about pensions so the full blown DIY route would not be a good idea for me. I would like to transfer out of RL into another pension plan and pay a fixed fee for annual reviews. In the meantime, I will educate myself!

This does not quite make sense. You want to dump the current advisor as you do not think you get value for money .
Then you want to move out of current RL plan and move it another one , although you say I am clueless about pensions .
Then pay a fixed fee for an annual review . The fixed fee will probably not be that much less than you are paying now as each review will probably be treated as a new review . So back to square one . Your options are probably 
1) Stick with current IFA but ask them to reduce the charge to 0.5% and that you want to review their recommendation of the RL funds. Or get a new IFA on similar terms .
2) DIY
I do not think some kind of half way house between the two is practical 

It is a good point as the adviser may think the OP is a low knowledge investor and not ready for more advanced options and is correctly keeping it within their scope of understanding.   However, if the OP believes they are ready for something better then the adviser can make the changes to reflect that.    Or the OP can move it to DIY and lose that safety net.  They could do fine and save money or they could make a right mess of it. (one of the options they have mentioned actually increases the charges which seems to defeat the objective)

Prism

Blackbeard_of_Perranporth said:

garmeg said:

Blackbeard_of_Perranporth said:

I pay my FA about £3,000 every year and take myself on a decent holiday!

I do my investments myself, buying funds I have researched. This are funds, where a manger does the leg work on the investments. That is what they are paid for! Mty spread is overt 8 funds in total, with their performance running at around 4.5% for my ISA and SIPP is around 8% over three years. Funds range ion the last three months from +9% to a loss -5%. Since the bang of March 2020, I have regained ground, now a loss of just £1,300 this year since March. But year on year, still good!

What funds have you got? No need for amounts, just interested in the actual funds. Thanks.

I use a Fidelity SIPP. It has two growth funds, global equity and a U.K. futures. Runs at 50:50, but varies between 45:55! I never pay an IFA thief to rebalance. It has run like this for ten years!

ISA pot is 6 funds. Across global fund, uk equity and high yield!  Uk equity is poor, high yield! Oops. But emerging markets is running high, but balance is good. Pots are within about 20% of each other, though worse one is low! It could have been a tad better this year.

Monthly I make a deposit of sorts, and spread, or just pick one fund, depending on recent performance or market.

Then I rely on the fund manager to make my money grow, that is what he is paid to do. Why do I need another IFA to advise me.

Also expect losses. In March, I reacted early and have regained ground, down marginally by about £1,500. It could had been a lot worse!

To be honest this is not a shining example of the benefits of not employing an IFA. Even though its not the IFAs job to get the best performance they should be able to put together a balanced allocation of funds which have a higher chance of doing better with lower risk. Considering what you are invested in, your performance figures from the earlier post are not wonderful. I am assuming those % figures are per year rather than a total return over 3 years? You may have done better with an IFA even with the extra fee.

Cus

Investor67 said:

Would greatly appreciate the forum's thoughts.
I have been invested in the Royal London Governed Portfolio 7 since 2016 on advice of an IFA. It has an AMC of 0.4% so I do benefit from a discount. RL also has a profit share which has paid out each year at around 0.18%. 
My concern is that for some reason I agreed to pay to the IFA an ongoing "wealth management" fee of 0.75% of the value of the pension. This is in addition to the 1% I paid him to arrange for the transfer of other pension pots to RL. However, the only "wealth management" service I receive from him is an annual review of the pension. He says that he regularly monitors the pension and is in contact with RL and will advise me of any changes.  That's it!  Complete rip off? 

For that fee, your wealth manager should be beating anything you could do DIY.

[Deleted User]

“I use a Fidelity SIPP. It has two growth funds, global equity and a U.K. futures. Runs at 50:50, but varies between 45:55!”

Futures are typically used as a risk mitigation measure for specialized circumstances. There was a time I had my company shares which jumped and I couldn’t get rid of them for tax reasons, so I bought futures (shorts) to mitigate the risk. Its an insurance which has costs associated with it. There are times when you don’t want to hold any futures. 

Why would you put half of your SIPP into futures? 

Investor67

A big thank you to everyone here.  You helped me straighten this out.  I have fired the IFA and demanded a refund of.25 of the fees for the past 4 years. I have also asked him to justify the RL choice as it was the only option he presented me with and I am invested in only one RL fund.  I am transferring to vantage lifestrategy 60 which is not only cheaper than the RL fund but has better performance over the past five years. 
I should get a refund from them because in the contract I signed with them they list the services they would provide for the .75%.  The services are  Full Ongoing Access to Support, Annual Statement, Annual Review, Annual Rebalancing, Ongoing Tax Planning , Annual Asset Allocation & Fund Review, Quarterly Newsletters and Online Access to Personal Client Site.
The only service I received was the Annual Review and the Annual Rebalancing is irrelevant as I am invested in a single self balancing fund.
When I complained a few days ago he offered to send me links to the website and to download their app!!  After I have paid .75 for 4 years.
Just to warn people, if you do need an IFA, I would recommend based on my experiences here that you understand exactly what you are paying for and do not accept a percentage alone as sufficiently transparent for a fee quote.  Ask to see what that percentage is as a cash amount.  In addition, don't instruct an IFA who makes only one recommendation to you for a product especially a straightforward pension product.

BritishInvestor

Investor67 said:

 In addition, don't instruct an IFA who makes only one recommendation to you for a product especially a straightforward pension product.

I'm not clear what you are saying is the preferable alternative?