IFA Advises Pension Move to True Potential : Thoughts Please?

[Deleted User]

Foresty_Forest said:

My IFA wants me to move my pension and ISA from AVIVA to True Potential. Apparently this move won't incur any charges. I guess my IFA would get a commission for this move, but what would be the Pros and Cons for me? And has anyone dealt with True Potential themselves and have any good/bad feedback.
Thanks

Good move for your IFA, bad move for you.

https://www.tpllp.com/true-potential-portfolios/

Take a couple of minutes to look at the performance of their funds since inception: - first thing that strikes you, in every case, is how True Potential managed very good percentages in their first year then, after a reasonable second year progress has  dwindled to nothing, or worse, as they took on more and more passengers. The majority of investors have made nothing in the bull market of the last three years.

I don't like the way they hide their charges behind a headline figure "your portfolio is worth this today", 
I don't like their pigeonholing of every customer to a bogus "silo" that is perpetually being rebalanced against its neighbour. Again, easy for TP to shift around the underlying fund allocations, but it is the customer who gets charged for it.
I don't like the way this company has exploited the DB to DC pension transfer process: the fallout from this will only become apparent in 10/15 years when the gullible find their pensions eaten away to nothing by financial industry charges.
I don't like the way they exploit the greed of retiring IFA's, incentivising them to throw their clients under a bus.
I don't know what the term "beyond wealth management" means.

dunstonh

I don't like the way they exploit the greed of retiring IFA's, incentivising them to throw their clients under a bus.
I don't know what the term "beyond wealth management" means.

It is not greed.   An IFAs business has value.   What they are effectively doing is buying the business but want it moved to them rather than remain independent. 

Most business people retiring will look to sell their business.    To refer to that is greedy is inappropriate.   

[Deleted User]

dunstonh said:

I don't like the way they exploit the greed of retiring IFA's, incentivising them to throw their clients under a bus.
I don't know what the term "beyond wealth management" means.

It is not greed.   An IFAs business has value.   What they are effectively doing is buying the business but want it moved to them rather than remain independent. 

Most business people retiring will look to sell their business.    To refer to that is greedy is inappropriate.   

Uh huh.
And, as an IFA, dunstonh, what would be the basis of your recommendation for the transfer of loyal clients' investments and pensions to True Potential,  

dunstonh

And, as an IFA, dunstonh, what would be the basis of your recommendation for the transfer of loyal clients' investments and pensions to True Potential,  

None whatsoever as I don't believe TP is better than independent solutions.

The OP should be saying thank you very much for the service you have given us over the years but we want to remain with an independent.   They should then find a new IFA to replace him.  As the platform and products are already in place, a new IFA can take it over easily.

The choice always remains either DIY or use an IFA.  Not an FA/tied sales rep.  If an IFA is giving up their IFA status or selling to a non independent then move to a new IFA if you still want an advice service.

cfw1994

dunstonh said:

 I guess my IFA would get a commission for this move

No. Commission does not exist any more on business arranged after January 2013.   HOWEVER, it is possible that money could be exchanged behind the scenes even though it is not officially a commision.

Ok, my IFA was definitely an IFA, but maybe not now? Can I check somewhere?

This is important.  True Potential operates their own salesforce.  Although they do make their service available to IFAs.    What often happens, especially with older advisers close to retirement or those that are suffering increased costs and want to cut back (being an IFA is more expensive than being an FA), is that they look to move their clients to a restricted offering and True Potential is frequently used for that purpose.

There was a media article earlier in the year on citywire saying that True Potential were paying 8% for retiring advisers and 2% for those not retiring for moving business to TP.

https://citywire.co.uk/new-model-adviser/news/true-potential-offers-8-aum-cash-deal-to-retiring-advisers/a1376828

The general rule of thumb that is often mentioned on this site is to avoid firms that use the "wealth management" tagline.  They are usually more expensive and you are limited to their options.  True potential is a restricted option.  Unlike Aviva platform which is whole of market.      

In bold: that sounds....er....somewhat scandalous.  

For a long time I’ve been reading words on this forum about how “commissions” no longer exist....yet, to all intents and purposes, an IFA is receiving money “behind the scenes” for suggesting a move?  Sounds as good as a commission to me.  Or rather, a lot worse, if it is behind the scenes.

I would avoid True Potential like the plague.  

Buying in business from what were Independent Financial Advisors to slide customers into tied offerings reads very much like a despicable way to take business.  There’s your next pensions scandal in the making.
It is indefensible when these supposed IFAs take steps like this without being completely up front as to the reasons behind the suggestions! They are no longer acting as an IFA for their client, & ought to be penalised for such behaviour.  It speaks volumes for how much they really care about their clients.
IMHO, of course.  Others may feel this is perfectly acceptable business behaviour.....

fred246

On this forum you always read about people who are happy to pay their IFA thousands of pounds for 'servicing' a portfolio. They will pay year after year after year. Of course it only takes a few seconds. So these customers are incredibly lucrative. If you have a list of these gullible persons it then becomes a valuable asset that people can sell. It really is an incredibly crooked practice so is something that you would expect IFAs to be involved with. I expect the reality will be buried within their paperwork. In the days of commission it used to always be on the back page. Everyone always got so bored that they never read the back page.

dunstonh

In bold: that sounds....er....somewhat scandalous.   For a long time I’ve been reading words on this forum about how “commissions” no longer exist....yet, to all intents and purposes, an IFA is receiving money “behind the scenes” for suggesting a move?  Sounds as good as a commission to me.  Or rather, a lot worse, if it is behind the scenes.

The thing is that he wont be an IFA but an FA at that point.   

Commission is factored into the price of a product.   This buying of his converted book will be paid by the company and not factored into client costs.  

Buying in business from what were Independent Financial Advisors to slide customers into tied offerings reads very much like a despicable way to take business. 

It is not at all despicable.   Businesses buy other businesses all the time in all walks of life.   The new owners have a right to decide how they operate their new business.   If you don't like it, then you take your business elsewhere.

They are no longer acting as an IFA for their client, & ought to be penalised for such behaviour.  It speaks volumes for how much they really care about their clients.
IMHO, of course.  Others may feel this is perfectly acceptable business behaviour.....

It is perfectly acceptable business behaviour to sell your business.  

However, you are correct that it does speak volumes for how much they really cared.    It should be noted that most IFAs will pass their business to other IFAs.   However, there are a number of wealth managers that are hoovering up firms from those retiring or calling it a day and offering good money to do so.

fred246

IFAs always put their own interests before those of their clients.

cfw1994

dunstonh said:

In bold: that sounds....er....somewhat scandalous.   For a long time I’ve been reading words on this forum about how “commissions” no longer exist....yet, to all intents and purposes, an IFA is receiving money “behind the scenes” for suggesting a move?  Sounds as good as a commission to me.  Or rather, a lot worse, if it is behind the scenes.

The thing is that he wont be an IFA but an FA at that point.   

Commission is factored into the price of a product.   This buying of his converted book will be paid by the company and not factored into client costs.  

Buying in business from what were Independent Financial Advisors to slide customers into tied offerings reads very much like a despicable way to take business. 

It is not at all despicable.   Businesses buy other businesses all the time in all walks of life.   The new owners have a right to decide how they operate their new business.   If you don't like it, then you take your business elsewhere.

They are no longer acting as an IFA for their client, & ought to be penalised for such behaviour.  It speaks volumes for how much they really care about their clients.
IMHO, of course.  Others may feel this is perfectly acceptable business behaviour.....

It is perfectly acceptable business behaviour to sell your business.  

However, you are correct that it does speak volumes for how much they really cared.    It should be noted that most IFAs will pass their business to other IFAs.   However, there are a number of wealth managers that are hoovering up firms from those retiring or calling it a day and offering good money to do so.

You think his client realised that at that point?   I seriously suspect that might also have been factored in "behind the scenes" - it didn't appear super-clear from Foresty_Forest's original post.
So if the OP does NOT move to True Potential, will they still pay the IFA some fee?  One would assume not, given the business is not passed over.....

Yes, you are right that businesses sell to other businesses all the time, and sometimes that leaves a nasty taste to existing customers.   When responsible for dealing with those customers monies, however, I would suggest it is rather different to Unilever buying Ben & Jerry's.   B&J customers might not like the direction Unilever take, but they are not having their funds taken over. 
I guess it is good that the OP has spotted this and can take appropriate action.  

IvanOpinion

I would run away very very fast.  Your IFA is probably doing this purely out of self-interest and to make money for himself (I think I read somewhere about TP offering a kickback to retiring IFAs).  You may not incur any immediate charges but you will probably pay a high price for it over the next few years. 

You may not have to move the pension and, if you have the confidence/knowledge you can easily manage it yourself.  Even if you have to move it the process is simple (I moved mine from Aviva a few years back (mainly to reduce charges), it was hassle free) - just keep an eye on any 'valuable benefits' that might affect your decision. 

If you don't have the confidence/knowledge then find yourself a new IFA.