Early retirement planning & IFA/FA

Langtang

We are in the middle of settling up my In-Laws estates, they both sadly passed away within 4 days of each other in August. We’re not sure what the final figure may be yet, due to wills and 30 day clauses, but we have a ball-park figure. 

We feel we would like to take early retirement (each 57 and looking at 60), and are looking at taking financial advice. My wife is a member of unison, the Union. They have an offer to members of some free advice. We have booked a telephone meeting with them for next Thursday, and I have a couple of questions. 

The offer is with a company called Lighthouse Financial Advice Limited, who are a part of Quilter Financial Planning. They are a restricted Advisor as opposed to an independent one. Does anyone have any thoughts on restricted vs Independent? What about the company itself?

Are we being premature in seeking advice before the estate is settled? What type of questions should we be asking, and what constitutes free advice? What thoughts do others have in regards to ways to invest, just so we have a heads up when offered options?

Can we see more than one advisor? SHOULD we see more than one? What happens if we don’t like the advice, do we just walk away?

I would post more details here regarding facts and figures, but not sure what the protocol is for asking for advice, sorry, suggestions.

So many questions, apologies. Thanks for reading. 

dunstonh

The offer is with a company called Quilter Financial Planning, who are a part of Quilter Financial Planning. They are a restricted Advisor as opposed to an independent one. Does anyone have any thoughts on restricted vs Independent? What about the company itself?

The choice is usually between either going DIY or using an IFA.  You should never need to use an FA.  There is little point as restricted means limiting options.  Frequently, as is the case with Quilter, that means using their sales rep, their platform and their investments.   An IFA has access to quilter investments and the platform along with the whole of market.  So, what you need to ask yourself is whether you want an independent adviser or a sales rep.

What type of questions should we be asking, and what constitutes free advice?

You don't get free advice. Its a free meeting to see if you and them get on and see an area they can proceed in.

What thoughts do others have in regards to ways to invest, just so we have a heads up when offered options?

Investing is largely to do with opinion. There are plenty of bad ways but there is no one good way.  Structure, process, due diligence and suitability are key.  What is good for one person could be bad for another.

Can we see more than one advisor? SHOULD we see more than one? What happens if we don’t like the advice, so we just walk away?

At some point you will be told that if you proceed beyond that point, you will incur charges.   If you pull out before that point, then there is no cost.  After that point, there will be.

semiplural

Hi Langtang,
Firstly sorry for your losses.
I am probably not best placed to directly answer your questions and to be honest for at least some of them, the answer would be "it depends".
However I can perhaps give some suggestions as to things to think about before deciding this things.

• Do you have a clear view of what income you would like in retirement?
• Are there any lump sum amounts you would like to draw or release? (eg house deposits for kids, grandkids - that world cruise you have always wanted to take etc.)
• Would you like to leave an inheritance.
• Taking in to account the inheritance, any other savings, pensions and state pension, how realistic are your plans?

If you are reasonably competent with spreadsheets, it would be relatively easy to produce a lifetime cashflow to determine if your assets and future pension incomes would be sufficient for your needs. As a base case I would take a quick view assuming ZERO interest on your cash sum and your income requirements increasing by perhaps 2% per year inflation. 
If this came out with a view that your money wouldn't run out until your are say 125, then you probably don't need advice - you could just put the money in the bank and never worry again.
However, dependent on how 'savy' you are yourself, you might benefit from advice. You might be able to achieve a significantly higher retirement income - would that be nice?

So from my point of view, the first step is to have a fairly clear idea of what you want. A good IFA should be able to help you work that out; but I hear a certain amount that suggests some try to steer you towards what they think you should want.

As I say not really answering your questions, but I hope it is of some use.

Langtang

Thank you for replying to my question(s). We had set up the meeting before realising they were not independent. It was only once we’d booked the appointment and they attached a flyer/shill for their company that we realised otherwise. 

My initial instinct is to cancel the appointment. As you quite rightly say Dunstonh, you should never need to use an FA with other options available. 

Sadly, I am not qualified to DIY. My only option would be an IFA. 

What is the protocol for posting details of our situation and allowing the very knowledgable people here to chip in with suggestions? I fully understand if it isn’t the done thing. 

kangoora

People post their portfolio's, assets, income requirements, planning details on here all the time asking for comments - i did myself a long while ago. You'll usually get plenty of good suggestions (with the odd muppet ideas occasionally mixed in for flavour )

semiplural

Hi again Langtang - 
With regards your potential appointment with Quilter - if you are confident in your resilience to not agree to anything in the meeting, it might still be educational and they might present you with some options you had not thought about. However I absolutely understand that some people find it really challenging to say no to a pushy sales type.
Really up to you therefore as to whether to continue with the appointment, but if you are sure that you cannot DIY then it might also be the case that you would not learn anything useful from the experience.
 

Langtang

kangoora said:

People post their portfolio's, assets, income requirements, planning details on here all the time asking for comments - i did myself a long while ago. You'll usually get plenty of good suggestions...

Should I post that in this thread, or create a new one?

 Mindful not to clog things up with superfluous threads. I see how many posts and replies some people have under their belts, and would not wish to add to what would appear to be extra curricular activities i.e. their time.

garmeg

Langtang said:

kangoora said:

People post their portfolio's, assets, income requirements, planning details on here all the time asking for comments - i did myself a long while ago. You'll usually get plenty of good suggestions...

Should I post that in this thread, or create a new one?

 Mindful not to clog things up with superfluous threads. I see how many posts and replies some people have under their belts, and would not wish to add to what would appear to be extra curricular activities i.e. their time.

I would say this thread because you created it.

Langtang

We are looking to retire early (60) but don’t really know how to go about planning it. 

We have no family, we are both only children so we’re the end of the bloodline on both sides. We’d like to leave a little something to a friend’s kid in some way, but not sure how. 

We don’t live extravagant lives, our main monthly expense (after food) is a new car each on finance every 3 years. We haven’t had a foreign holiday in quite a few years, so maybe one (or a couple) of those each year might be nice. 

I read somewhere on a recent thread about someone with a £750k pension pot being told that it may only last him 15 years, so maybe we cannot afford to retire early! They say you should aim for two thirds of your total annual income as a pension, so can we afford to retire and take our pensions early?

Regarding our pensions, do we take them immediately, put more cash into them, leave them a few years and live off cash earned by investments, buy an annuity, do we take all the money and invest in a SIPP, should we take the lump sums offered (seems like we wouldn’t need to, but there may be a financial reason to do so)

When it comes to investing, we don’t have a clue. We have only ever had ISAs, probably because they were easy to set up. We only have Standard Life shares because we had an account with them when they floated, so the Chevron shares will be something new for us. Do we keep them, sell them, buy more, buy different shares?

My In-laws had a few investment/insurance bonds that did ok for them, so do we get more of those? Are they worthwhile today?

What about the house? I am in favour of keeping it as an income stream but my wife say it holds too many memories to keep, plus it would need a bit of money to put in in a “rentable” condition. Also, you hear so many horror stories of nightmare tenants. 

Risk level? We are not adventurous in that way, but would like to see some growth to be able to supplement our pensions until the Govt ones kick in. Do we split it low/mid, all low, all mid, some high.

We feel very humbled and blessed to be in the position we will find ourselves, and take nothing for granted or are blasé about anything. 

Sorry for all the questions, we just want to be clued up before seeing the IFA. 

Thanks in advance for any replies. Any other info, please ask. 

Me

57 healthy

£24-£32 pa gross salary

Basic Isas totalling £66k

Savings totalling £34k

Private pension paying £6400 at 60.

Workplace pension £29k paying £275 at 60]

Government pension paying £9.1k from 2030

 OH

57 healthy

£24k pa gross salary

Basic Isas totalling £62k

Standard Life shares £9.5 k

NHS pension £6144 at 60

Private pension £864 at 60

Government pension paying £9.1 k from 2029

Together

Mortgage free house c£300k

£35k in basic bank account

Inheritance (pre IHT) of:

US shares of c£140k

House c£300k

Cash £310k

Insurance bonds £190k

ISAs £60k

Unsure ‘of our IHT liability at present, due to various issues with Wills and clauses, but low end would be £500k (FIL’s £325 + £175) 

BritishInvestor

semiplural said:

Hi again Langtang - 
With regards your potential appointment with Quilter - if you are confident in your resilience to not agree to anything in the meeting, it might still be educational and they might present you with some options you had not thought about. However I absolutely understand that some people find it really challenging to say no to a pushy sales type.
Really up to you therefore as to whether to continue with the appointment, but if you are sure that you cannot DIY then it might also be the case that you would not learn anything useful from the experience.
 

I'd be wary of an adviser presenting options in a first meeting - it's my warning sign #3
The first meeting should be about understanding if you're a good fit, and whether they can add value to your situation to cover their fees.

tacpot12

I have some questions about the information you have provided:

Is your Private Pension going to pay £6400 per year for the rest of your life and will this figure rise with inflation? How is it going to do this? (This is unusual for a private pension.) 
Is your OH's Private Pension going to pay £864 per year for the rest of their life and will this figure rise with inflation?

Is the Workplace pension transfer value £29K?
Is the Workplace pension really only paying £275 per year? 

Which NHS Pension section is your OH in? (1995/2008/2015)
Is the NHS Pension figure reduced for early retirement if they retire at 60, or is this figure the maximum she can draw?