IFA costs

dunstonh

The Pru advisor was adamant that I could not make any transfer with an IFA having agreed. I have spoken twice to them since and did point out their statement that it was a recommendation but they still insisted that they would not transfer funds without.

Pru require an adviser if you wish to transfer it into the Pru drawdown plan.    Could that have been part of the confusion?

I live in a rural part of the South West and have contacted 5 different IFA's from a radius of around 35 miles, hoping in better times for a face to face meeting. If indeed I could find an IFA within the £1500-£2000 range I would far more comfortable. Perhaps this might be available in larger cities where there is more competition, I don't know.

City prices tend to be more expensive due to higher business rates and IFA firms tending to focus on higher net worth clients.   

My gut feeling is that either they have quoted DB transfer fees instead of DC or they target high net worth clients and pricing reflects their target market or they dont really want to do it and have priced it as a blocker.

What I mean is that I would be waiting until I feel more clear about the specific SIPP's I would want to transfer into. I have narrowed general options down to Fidelity and Hargreaves Lansdowne and have been thinking about the various options regarding ongoing costs and differing portfolios.

HL is more expensive than most IFA platforms.  What funds would you use (a good proportion use HL own brand funds which would increase the charges further and you could end up more expensive than the IFA).    
Then you have to ask why you want to move it from the Pru?   The Teachers AVC with Pru is more like the old fashioned Pru With Profits fund and is good value and not a bad option.  It also supports UFPLS (lump sum withdrawals).  Do you really need to move it at all?

Studio46

Dear DunstonH.
I am already inclined to the latter option i.e. leave it where it is and take lump sums. The issue with the advisor was definitely with regards to transferring funds elsewhere and I was very specific when querying this. They were keen to promote their own options and this felt me feeling that I was being trapped staying with the Pru. The whole issue arose when I sought to inform myself further after my PensionWise consultation a couple of years ago and a chat with a relative who works as an advisor for a pensions company. I had no intention of doing anything for a couple of years at least but felt that I should be checking things out well in advance. Its likely that various things will change over that time scale so I wasn't getting to the point of getting over specific. I agree with with your comments regarding HL and had established that the ingoing costs were not a great incentive. Overall, it appears that my fund is not sufficient to make any further investment worthwhile. In this worrying time I am starting to think that maybe I should spend it while I can. I'm mid 60's and might not fare well if and when I succumb to the virus.
It still grates however that IFA's can benefit unduly from what is effectively a captive group with few alternatives.
I'm very grateful for you and others taking the time to share your experience and wisdom.

zagfles

Studio46 said:

Thanks dunstonh and Albermarle for you kind advice. I am retired and taking my teachers pension as I was made redundant last year. The Pru advisor was adamant that I could not make any transfer with an IFA having agreed. I have spoken twice to them since and did point out their statement that it was a recommendation but they still insisted that they would not transfer funds without. I live in a rural part of the South West and have contacted 5 different IFA's from a radius of around 35 miles, hoping in better times for a face to face meeting. If indeed I could find an IFA within the £1500-£2000 range I would far more comfortable. Perhaps this might be available in larger cities where there is more competition, I don't know. I probably used the wrong term 'volatile'. I am aware of the depression during the earlier months of the pandemic and the subsequent improvements in different markets. What I mean is that I would be waiting until I feel more clear about the specific SIPP's I would want to transfer into. I have narrowed general options down to Fidelity and Hargreaves Lansdowne and have been thinking about the various options regarding ongoing costs and differing portfolios. I was following things rather more avidly last year but having been rebuffed by the Pru and being horrified by the IFA costs I have been less inclined to follow markets until such time as there is a realistic option of making progress with my funds.  I have the Pru refusing to act upon my instructions without IFA approval and all the IFA's contacted thus far expecting a very handsome chunk of my investment. Drawdown seems to be the only financially viable option as things stand.

Just ask HL or Fidelity to arrange the transfer. I moved an old pension to HL a year ago and I didn't even contact the old provider, HL sorted it all. As long as there are no guarantees etc there shouldn't be an issue.

Albermarle

I have narrowed general options down to Fidelity and Hargreaves Lansdowne and have been thinking about the various options regarding ongoing costs and differing portfolios. 

I would not spend too much time deliberating which of these two platforms to go with . They are essentially very similar in what they offer. 

fred246

Studio46 said:

Meant to say, are people aware of any reasonably prised IFA's?

I remember reading a report and they said that there was ONE reasonably priced IFA. I think they were in Scotland.

Aged

fred246 said:

Studio46 said:

Meant to say, are people aware of any reasonably prised IFA's?

I remember reading a report and they said that there was ONE reasonably priced IFA. I think they were in Scotland.

I would be interested to read that report?

Gailymac

I'm very sadly divorcing and part of the process is predicting my ongoing financial needs. My husband spends about £2500 per year on his IFA. I dont have one yet, but will likely need one in the future. I am unclear of my 'wealth' or financial position for now so I have put £2500 on my Form E as a predicted cost, which my husband is disputing. I will hopefully own a property, and have a lump sum settlement to invest for future income, so Im not particularly wealthy or have complicated finances. Am I way off in predicting £2500 per year. Can anyone give me a rough ball park figure? Im 58 have a small pension and no real savings so it will be just my property and settlement. I may not even need an IFA?? but feel I should put a figure of some sort.

Albermarle

An IFA might typically charge one or two per cent as an initial charge and then 0.5% to 1 % as an annual charge.
Probably an IFA would only be interested in managing the investment of the lump sum . If it was less than £50K then probably you would have difficulty finding one interested .
When you get the lump sum , you need first as a priority to establish some cash savings ( for emergencies , house repairs etc ) before thinking about investing any of it .

cfw1994

Gailymac said:

I'm very sadly divorcing and part of the process is predicting my ongoing financial needs. My husband spends about £2500 per year on his IFA. I dont have one yet, but will likely need one in the future. I am unclear of my 'wealth' or financial position for now so I have put £2500 on my Form E as a predicted cost, which my husband is disputing. I will hopefully own a property, and have a lump sum settlement to invest for future income, so Im not particularly wealthy or have complicated finances. Am I way off in predicting £2500 per year. Can anyone give me a rough ball park figure? Im 58 have a small pension and no real savings so it will be just my property and settlement. I may not even need an IFA?? but feel I should put a figure of some sort.

Sorry to hear this.   
I would suggest your solicitor needs to be on the ball with helping you with this sort of advice.   
A decent one well versed in family law is the best place to get help & advice on this, & (obviously!?) not the same as the one your husband is using.  

bostonerimus

Coming from the US the UK pension world seems very bizarre. The following will not  answer your question, but just me letting go of my spleen. If the AVC is in a DB scheme then a transfer should not be allowed as you signed a contract along with a load of other people, if it's a DC scheme then you should be able to transfer it to a SIPP or similar DC scheme when you leave work, there should be no requirement for any advice and also no possibility of crying foul after the fact. I can see why the AVC administrator or the receiving company demand that you get some third party advice as in the UK people seem to want to be protected from their own bad decisions after the fact. However, the costs involved in getting that advice seem to be outrageous.