What pension planning advice do I need?

Albermarle

Just to add to the above . A common misconception is that an IFA will get better investments results . What they actually do is match the investments to your situation , objectives and risk tolerance , which is different . Also it is just as important they can organise your finances in the most tax efficient way .
An IFA will have an initial charge of say maybe around £2K and then there is an ongoing charge of 0.5% to 1 %.
Normally they will want to move all your pensions ( not the DB One ) to their preferred platform /provider.
Alternatively they can provide a one off advice of what to do, but then you have to go and manage that yourself.

SJP have lock in clauses and can be expensive to get out of them, if you want to leave early.

Otherwise you can do some reading ( this forum can be very useful, although it is not personal advice , only opinion/comment) and DIY , it's not rocket science especially if you are reasonably numerate /intelligent.

ORC

If I were you, I'd share my details here, along with my tentative plan, and see what people think. That will help you identify areas for further thought, including those for which it may be worth taking advice.

mcn99

I was in a similar position, and contacted 4 local IFAs looking for fixed fee advice. Everyone wanted to take ~2% of pot and ongoing advice fee. All I was after was a session to go through my figures, not a full blown managed service.

I will never again go near an IFA after this. Unless you have complicated finances, a little bit of research, and you can find out what you need

LV_426

mcn99 said:

I was in a similar position, and contacted 4 local IFAs looking for fixed fee advice. Everyone wanted to take ~2% of pot and ongoing advice fee. All I was after was a session to go through my figures, not a full blown managed service.

I will never again go near an IFA after this. Unless you have complicated finances, a little bit of research, and you can find out what you need

This is exactly what I'm wary of. However, the IFA I'm talking with is giving me encouraging messages, such as "if any further advice is needed". He seems happy to verify my early retirement plans initially, which is the main thing I'm interested in right now.
I'm happy to pay for advice, I really don't expect people to work for nothing. But I'd just like to get clear exactly what I'm paying for.

dunstonh

I was in a similar position, and contacted 4 local IFAs looking for fixed fee advice. Everyone wanted to take ~2% of pot and ongoing advice fee. All I was after was a session to go through my figures, not a full blown managed service.

IFAs are not allowed to insist on ongoing servicing.   You need to state you are after a transactional service.   A lot of IFAs will have a percentage based fee but with a cap and collar.  Not many will have a fixed fee as it would restrict their business.

FAs and Wealth managers will frequently only offer ongoing servicing as that is their business model.  Maybe the four you contacted were on the wealth management model and not general practitioners. 
 

LV_426

dunstonh said:

I was in a similar position, and contacted 4 local IFAs looking for fixed fee advice. Everyone wanted to take ~2% of pot and ongoing advice fee. All I was after was a session to go through my figures, not a full blown managed service.

IFAs are not allowed to insist on ongoing servicing.   You need to state you are after a transactional service.   A lot of IFAs will have a percentage based fee but with a cap and collar.  Not many will have a fixed fee as it would restrict their business.

FAs and Wealth managers will frequently only offer ongoing servicing as that is their business model.  Maybe the four you contacted were on the wealth management model and not general practitioners. 
 

Well I have to say from past experience, the IFA I dealt with previously was trying to sign me up for an annual management plan. At the time I didn't like it, as my financial affairs aren't complicated. It just didn't seem like value for money.
This was after I got some very good advice on my ISA. But I'm quite wary of people offering free advice, as I tend to think it's a hook to get you to sign up for something more.
As I say, no problem at all paying people for honest work they do. But let's be transparent about it.

OldMusicGuy

ajfielden said:

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.

I was in exactly the same situation about 5 years before I retired. I paid several thousand pounds for some one-off financial advice (from HL). They suggested a few sensible things and created a multi-sector portfolio for me, mainly of actively managed funds. This prompted me to look at what they had suggested, and I realised it was complex and costly (even though there was no ongoing fee to them). I did a bit of reading (the John Edwards book I mentioned, plus others by Lars Kroijer) and decided that a simple, low cost strategy based on multi-asset funds was for me. It's working fine. You do not have to understand all the different funds, many (like me) just use a few well-diversified multi-asset funds. It takes very little time to manage, and does not involve poring over anything. You need to understand why this approach works and if it might be suitable for you before you pay thousands of pounds to anyone. 

Everything the financial adviser suggested I could have found out myself by doing a bit of reading on here. And I have ended up ignoring their investment strategy that I paid thousands of pounds for, because once I understood a bit more I realised it was not right for me. 

Are there any benefits to using SJP or an IFA? Yes, they will save you a bit of time by not having to do some reading and research. Will they perform any better after costs than you making a few simple decisions? You will never know. 

Do you want to pay thousands of pounds every year to save on a bit of reading and research time? That's a decision only you can take. My eyes were opened when I came on here (like you) and after I read that John Edwards book. Managing my pension is the most important aspect of my life for the next 30 plus years. I wanted to take control of that.

So please at least do a bit of reading using the resources suggested before you decide what to do. IMO you owe it to your future self. At the very least, read that John Edwards book I recommended, it will help you understand the basics that you need to know and will help you ask more relevant questions for any potential adviser.

LV_426

Just ordered the John Edwards book. Hey for the sake of £6.95 if it saves me £1000's that's a good deal

LHW99

ajfielden said:

Just ordered the John Edwards book. Hey for the sake of £6.95 if it saves me £1000's that's a good deal

And even if you decide you would still like to get transactional (or ongoing) IFA help, you will have a much better base to understand what they are suggesting, and to ask relevant questions and comprehend the answers.

LV_426

Ok let me switch the question around. Are there cases where getting help from a financial advisor is considered wise, for pension planning?

Let me tell you what's worrying me most about this: It's because you don't get a second chance to plan your finances for retirement. There's only one go at it, and you can't rewind time to do things differently. And we're talking about your financial stability for the rest of your life.