Is My IFA Trying To 'Sell' Me To True Potential?

Foresty_Forest

My IFA wants me to move my SIPP from Aviva (bought through IFA) to True Potential. It's apparent that TP will take over management of the SIPP and my IFA will be paid an introducers fee - apparently this a one year arrangement - for the duration he won't be paid by me.  After 12 months, I can either keep using TPWM or return to my IFA. My IFA will 'remain' my IFA during this one year period and I can still consult him as TP will have paid him his fee. 

This has set off my alarm bells. Now I'm thinking if TP have a wealth management team that costs the same as my IFA, does Aviva have a similar wealth management service? If so, why not sack my IFA and go with the Aviva team?

My IFA reckons I'll lose up to a month's investment time as my SIPP is cashed for the move. TP does seem to be performing better than Aviva - but that might not last? What would I lose if I were to do without my IFA? Will I be charged If I sacked him? 

Btw. If I make enquiries with Aviva - would they inform my IFA. Also, does anyone know what TP would be paying my IFA if I did switch?

HansOndabush

Do what you think best; it's your money. Your idea of sticking with Aviva sounds correct. IFA's make a ton of money from introducing business so it is probably more in the IFA's interest to switch providers than yours.

The funds from any provider are remarkably similar so it just boils down to what funds your pension is invested with rather than who the provider of those funds is. e.g. it matters more whether you are in bonds or equities, the UK market, the US, or global than who your provider is.

Albermarle

From other threads it is likely that your IFA is planning to retire and is being incentivised by TP to transfer the customers over to them .
TP does seem to be performing better than Aviva - but that might not last? What would I lose if I were to do without my IFA? Will I be charged If I sacked him? 
The performance of the Aviva pension is dependent on the portfolio of investments chosen by the IFA.
There should be no charge if you decide not to use the IFA anymore but check the contract you have with them .
It is possible that Aviva would want to change you to a different pension as some providers have different products for advised and non advised customers. You would have to give them a call. 

[Deleted User]

Foresty_Forest said:

TP does seem to be performing better than Aviva.

Be wary of True Potential top line figures. 
https://www.tpllp.com/true-potential-portfolios/
As you can see above, ALL of their portfolios produced strikingly better returns in the first two years while languishing for the last three. At the same time, the overall value of these portfolios has been rising exponentially, which means unfortunately that most investors have seen negligible growth.  It appears that True Potential, with a little help from their friends in Financial Advice, have been very successful at luring complaisant customers who think that "Total Financial Control At Your Fingertips" means having an app that shows them a headline figure.

zagfles

This seems to be happening a lot, just search this forum for "true potential". See also:

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

dunstonh

My IFA wants me to move my SIPP from Aviva (bought through IFA) to True Potential. It's apparent that TP will take over management of the SIPP and my IFA will be paid an introducers fee - apparently this a one year arrangement - for the duration he won't be paid by me.  After 12 months, I can either keep using TPWM or return to my IFA. My IFA will 'remain' my IFA during this one year period and I can still consult him as TP will have paid him his fee. 

That does not sound like an accurate representation of what is likely to be happening.   I suspect you have either misunderstood or a fast one is being pulled.
TP do buy out IFA businesses.  Often when the IFA is retiring or looking for an easier life by dropping IFA status to become an FA. (being a directly authorised IFA costs more than being an FA and requires far more admin).      They do not pay IFAs money only for the IFA to continue and then poach you back after 12 months.   That would be highly unethical and not in your interest.  If TP was aware your adviser was planning that, I suspect they would take appropriate action.     

TP do (or did - I dont know if they still do) make their product available for IFAs to use.  However, remuneration received by the adviser must be paid explicitly by you. TP would not pay the adviser.  That is a regulatory requirement.    As you are saying TP is paying the adviser, this makes it sound like the IFA is giving up or moving to TP.

This has set off my alarm bells. Now I'm thinking if TP have a wealth management team that costs the same as my IFA, does Aviva have a similar wealth management service? If so, why not sack my IFA and go with the Aviva team?

Why would you want to go with a wealth management option?    They add a layer of charges and the overall bottom line is more expensive than a typical IFA advisory portfolio.  Aviva is a whole of market platform and has a number of DFMs on it.  However, they do not replace the IFA.  Wealth management (DFMs) are all about making the adviser's life easier and getting the consumer to pay for it.  There are some exceptions where it could make sense for some people but for most, it is just an additional layer of charges for no real benefit.

TP does seem to be performing better than Aviva - but that might not last?

Aviva does not perform.    Aviva is a whole of market platform.  It is the investments the adviser picks that perform.     So, you could easily get cheaper and suitable investments on the Aviva platform.  The point of whole of market is the wide selection to pick from.   Tied options can only offer what they are tied to.

 What would I lose if I were to do without my IFA? Will I be charged If I sacked him? 

If he is selling up to TP then he wont be your IFA any more. He will either cease to be an advser or become an FA.   You cant be charged for ending servicing.      
Bottom line is that any IFA selling up to a tied business is putting you in a worse situation.    They are not doing it for you.  They are taking you from whole of market advice and products to single prover advice and products.  

Btw. If I make enquiries with Aviva - would they inform my IFA. 

Sometimes they well depending on what you tell them.   Aviva are not the same as TP. TP are not the same as Aviva.     Aviva cannot replace an IFA.  A DFM does not replace the IFA.  

Also, does anyone know what TP would be paying my IFA if I did switch?

I have seen figures quoted in the press as being up 8x the annual fee income you bring in to TP. 
True Potential offers 8% AUM cash deal to retiring advisers - Citywire

dunstonh

IFA's make a ton of money from introducing business so it is probably more in the IFA's interest to switch providers than yours.

On that point, no they don't.    With the exception of business buyouts, providers are not allowed to pay any remuneration to an adviser in relation to products and investments being "introduced" to them.    It was banned across the marketplace at the end of 2012.

BananaRepublic

It’s quite hard to get through the hard sell sales pitch, but unless I am mistaken they are selling five off the peg portfolios, and they match your risk profile to the appropriate one. 

To be honest the performance of their funds is modest. They do give fund details on the documents page. You might do better selecting some index funds (Europe, UK, US say) with a sensible allocation matching one of their funds, or get your IFA to help. In general I don’t like off the peg portfolios, that might be a mistake on my part as they might have value for some. Someone more knowledgeable in this area might comment. 

For reference, I pay fund fees plus 0.25% on the first £250,000, 0.1% up to a million etc for using my platform. An IFA would charge an additional 0.5% per year, assuming the same platform. I select funds myself, and over five years I’ve done far better than theirs. I use mainly active funds apart from the US. 

grinch53

You can either transfer to their portfolios or keep your existing pension and investments as they are as they are flexible on this point.(this is from a True Potential advisor)Or go it alone and remain on the Aviva platform although I do not know if the Aviva charge remains the same so you may need to contact them regarding this .

fred246

Financial advisers don't let the needs of the customer get in the way of them making a good deal for themselves. They are the important ones in the relationship. Not the customers.

IvanOpinion

Personally, I would start walking and then running away - it is unlikely that this is being done in your interests.