What pension planning advice do I need?

LV_426

Sorry, I originally posted this in the wrong forum.

I'm 54, and recently been spending a lot of time marshalling my pension funds, which are numerous as I've worked for several companies in my career.
One of my pension schemes is a deferred benefits (DB/Final salary) plan, which I'm hoping will be a solid plank of my retirement income. I've also contributed to various company group pension plans, with mixed values. I also have a stocks/shares ISA.

I would ideally like to retire at 60, and think I've worked out we'll have enough funds to bridge the gap to the DB plan plus state pensions becoming available at 65/67.

I'm strongly considering getting some financial advice on all of this. But I'm not really sure what level of advice I need, and how an adviser could benefit me, beyond confirming my early retirement plans.

I've approached an IFA, and also been talking to a partner of St. James Place Wealth Management, who are definitely not independent. I believe the latter has high charges, and their funds aren't great performers. But I would not be looking to invest in their funds. All I'm looking for really is someone to review my pensions, and possibly optimise them before retirement. My current scheme is a SIPP, but I'm currently in the 'default' plan. Is that right for me?

What would you do, and can you shed any light on what level or type of advice I need. And would it be a huge mistake to go with SJP? The adviser seemed genuine, and is a local person to us. We got the impression we could trust her.

Thanks.

Marcon

ajfielden said:

Sorry, I originally posted this in the wrong forum.

I'm 54, and recently been spending a lot of time marshalling my pension funds, which are numerous as I've worked for several companies in my career.
One of my pension schemes is a deferred benefits (DB/Final salary) plan, which I'm hoping will be a solid plank of my retirement income. I've also contributed to various company group pension plans, with mixed values. I also have a stocks/shares ISA.

I would ideally like to retire at 60, and think I've worked out we'll have enough funds to bridge the gap to the DB plan plus state pensions becoming available at 65/67.

I'm strongly considering getting some financial advice on all of this. But I'm not really sure what level of advice I need, and how an adviser could benefit me, beyond confirming my early retirement plans.

I've approached an IFA, and also been talking to a partner of St. James Place Wealth Management, who are definitely not independent. I believe the latter has high charges, and their funds aren't great performers. But I would not be looking to invest in their funds. All I'm looking for really is someone to review my pensions, and possibly optimise them before retirement. My current scheme is a SIPP, but I'm currently in the 'default' plan. Is that right for me?

What would you do, and can you shed any light on what level or type of advice I need. And would it be a huge mistake to go with SJP? The adviser seemed genuine, and is a local person to us. We got the impression we could trust her.

Thanks.

You could do a lot worse than start here: https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/midlife-review-for-self-employed-people

(even if you aren't self employed!).

Also worth considering: https://www.pensionwise.gov.uk/en (free, but be aware it is 'guidance only' and covers DC plans rather than DB).

Who knows if the default plan is right for you, when you've said nothing about your attitude to risk, objectives, etc... You need to think about what you want to do/are comfortable doing and then consider if the default investment option aligns with that.

Linton

An IFA (preferably a small local firm) is the appropriate person to advise on pension plans and discuss the pros and cons of your various options.  Though this will depend on the size of the DC pensions and ISAs - if it's nX£100K then there is no problem, but is it's say £50K or less the IFA's charges may be an uneconomic % of the pot.

Even if you are thinking of going with SJP you should talk to 2 or 3 local IFAs.  You are likely to get a free half hour initial meeting where both sides can judge if they can work together and the benefits would be worthwhile.  You could make it clear you are mainly looking for strategic advice rather than a simple choice of funds if that is the case.  This would at least give you a basis on which to decide whether SJPs offerings are the most suitable for you.

Even if you end up just getting confirmationfrom your chosen advisor  that you ideas are fine it could be well worthwhile in reducing the worries.  But it is more likely that there are other options you had not considered and risks you had not taken into account.

There is a fair bit you can and should do before asking for advice. The first is to determine how much income you need for an acceptable standard of living.  A good starting point is what you are actually spending now minus the things that wont apply in retirement.

LV_426

Marcon said:

ajfielden said:

Sorry, I originally posted this in the wrong forum.

I'm 54, and recently been spending a lot of time marshalling my pension funds, which are numerous as I've worked for several companies in my career.
One of my pension schemes is a deferred benefits (DB/Final salary) plan, which I'm hoping will be a solid plank of my retirement income. I've also contributed to various company group pension plans, with mixed values. I also have a stocks/shares ISA.

I would ideally like to retire at 60, and think I've worked out we'll have enough funds to bridge the gap to the DB plan plus state pensions becoming available at 65/67.

I'm strongly considering getting some financial advice on all of this. But I'm not really sure what level of advice I need, and how an adviser could benefit me, beyond confirming my early retirement plans.

I've approached an IFA, and also been talking to a partner of St. James Place Wealth Management, who are definitely not independent. I believe the latter has high charges, and their funds aren't great performers. But I would not be looking to invest in their funds. All I'm looking for really is someone to review my pensions, and possibly optimise them before retirement. My current scheme is a SIPP, but I'm currently in the 'default' plan. Is that right for me?

What would you do, and can you shed any light on what level or type of advice I need. And would it be a huge mistake to go with SJP? The adviser seemed genuine, and is a local person to us. We got the impression we could trust her.

Thanks.

You could do a lot worse than start here: https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/midlife-review-for-self-employed-people

(even if you aren't self employed!).

Also worth considering: https://www.pensionwise.gov.uk/en (free, but be aware it is 'guidance only' and covers DC plans rather than DB).

Who knows if the default plan is right for you, when you've said nothing about your attitude to risk, objectives, etc... You need to think about what you want to do/are comfortable doing and then consider if the default investment option aligns with that.

I didn't actually expect anyone to answer that specific question here, it was rhetorical, and just something that I would want to ask a financial advisor. Obviously more information is needed to answer it. But thanks for jumping down my throat.

LV_426

Linton said:

An IFA (preferably a small local firm) is the appropriate person to advise on pension plans and discuss the pros and cons of your various options.  Though this will depend on the size of the DC pensions and ISAs - if it's nX£100K then there is no problem, but is it's say £50K or less the IFA's charges may be an uneconomic % of the pot.

Even if you are thinking of going with SJP you should talk to 2 or 3 local IFAs.  You are likely to get a free half hour initial meeting where both sides can judge if they can work together and the benefits would be worthwhile.  You could make it clear you are mainly looking for strategic advice rather than a simple choice of funds if that is the case.  This would at least give you a basis on which to decide whether SJPs offerings are the most suitable for you.

Even if you end up just getting confirmationfrom your chosen advisor  that you ideas are fine it could be well worthwhile in reducing the worries.  But it is more likely that there are other options you had not considered and risks you had not taken into account.

There is a fair bit you can and should do before asking for advice. The first is to determine how much income you need for an acceptable standard of living.  A good starting point is what you are actually spending now minus the things that wont apply in retirement.

Yeah, sorry I should have mentioned this, I've done a lot of groundwork, and given it some major thought, including taking stock of the living expenses you mention. The Mrs is just about fed up with me going on about it
I pretty much concluded that it was possible to retire early. But as you say it's whether all the angles have been covered, and there may be things I hadn't considered. Which is why I'm looking for some expert advice. Just not sure exactly what level of advice I needed really.

MEM62

ajfielden said:

and also been talking to a partner of St. James Place Wealth Management, 

Errr.....No!  You really do not want to do that.  Stick with an IFA.  

OldMusicGuy

Most people on here (me included) would say avoid SJP or anything with "wealth management" in their name. Generally they are expensive and no better than genuinely independent (and cheaper) alternatives. Your choice is either to go with an IFA or to continue managing things yourself. If you go with an IFA (a genuinely independent one), you will be paying a lot of money for something it sounds like to me you don't really need. Even genuine IFAs aren't cheap.

The alternative is to carry on doing what you are doing. Just do a bit more reading to educate yourself and build the confidence that you don't need an adviser to help you. Also, if you have a DB pension as your core, then your life is much simpler than someone like me who is wholly reliant on a large DC pot. 

FWIW I started off taking some financial advice but wasn't that impressed so I educated myself by reading on here and also on sites like Monevator. There are many useful books out there (John Edwards has several, the best starting point being "DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning"). I now manage everything myself and am very confident that the simple strategy I use is achieving my goals.

The most important thing before you pay someone for advice is to identify exactly what advice you want, otherwise you will just fall prey to slick sales talk. So at least do a bit of reading and research so you know what questions to ask any potential adviser before you talk to them. It sounds to me like you are pretty switched on and have done a lot of the basics. 

There probably aren't any angles you haven't covered, because it's not really that complicated. Unless you are really wealthy and have complex financial affairs, it doesn't have to be complicated. 

LV_426

Ok forgive me here if I'm asking dumb questions. Part of my problem is, I don't know what I don't know. I realise a lot of people on here have much more knowledge than me, and this is virtually the first place I've come to for more information.

Take my current pension scheme. As I mentioned in my original post, It's a SIPP, with a bewildering array of funds to choose from. I'm in the 'default' investment strategy. I have a day job which doesn't include poring over the performance of hundreds of funds and comparing them. Something I could ask an IFA to do is review this and advise on the best fund choice for me, bearing in mind my retirement plans. Is it worth doing that, or a waste of money?

So up to now I've done the sensible thing of contributing to pension schemes all my life. I just need to know at this point, with ideally 5 years until retirement, what needs to be done (if anything).
To me it boils down to a calculation of how much money will be in the pot at age 60, and if that can bridge the gap to other pension funds becoming available.

And is there any real benefits to using an organisation such as SJP? Yes they are expensive, but are they providing any services that justify the cost?

But anyway thank you for the constructive comments so far, it does help.

wjr4

SJP do not provide any further services than an IFA does. As mentioned above, contact a few local IFAs to discuss your plans. 

kuratowski

ajfielden said:

Something I could ask an IFA to do is review this and advise on the best fund choice for me, bearing in mind my retirement plans. Is it worth doing that, or a waste of money?

Yes, in my opinion, it is worthwhile for you to take independent financial advice, in this situation.  Advising on the most suitable asset classes, funds and platforms for you is exactly the role of an IFA. If you are not confident selecting the funds yourself, you will definitely derive value from the advice.  If you engage an IFA to manage your portfolio, they will try to ensure it remains suitable for you both now and in the future.  And an IFA will help you to plan your affairs to achieve the most tax-efficient result; this applies at both the pre-retirement stage and the post-retirement stage (drawdown, etc).

Many people will say that you could do it for yourself, with a bit of reading and research, and this is absolutely true.  But, if you don't want to do that (and take the chances of getting it wrong) then seeking professional advice is a good choice.  Again, this is my opinion, nothing more.

I also agree with previous posters - don't touch SJP, they will lock you into a more expensive in-house choice with penalties to exit.

dunstonh

I've approached an IFA, and also been talking to a partner of St. James Place Wealth Management, who are definitely not independent. I believe the latter has high charges, and their funds aren't great performers. But I would not be looking to invest in their funds.

SJP is a restricted FA service. They are only authorised to discuss the products, services and funds they offer.   

And would it be a huge mistake to go with SJP?

SJP cannot meet your objective as you don't intend to use them.  If you don't want to use their funds then you cannot go with them.

The adviser seemed genuine, and is a local person to us. We got the impression we could trust her.

I don't doubt that.   However, the same would be for every local adviser whether FA or IFA.    The main differences are those with salesforces get sales training and can be slicker in presentation than a local IFA that has to print their material on the office printer and doesn't operate like a salesforce.

My current scheme is a SIPP, but I'm currently in the 'default' plan. Is that right for me?

Are you sure it is a SIPP?  SIPPs don't have default funds normally.  Default funds only normally appear on stakeholder and workplace pensions (i.e. master trust schemes or group schemes).


The bottom line is that you should either DIY or use an IFA.   Avoid FAs and avoid firms that have wealth management in their name or tag line.