What pension planning advice do I need?

dunstonh

. What I would honestly like, is to run the plan by an advisor. But they don't seem to operate like that.

The regulatory requirements make that difficult as the adviser has to carry out due diligence on the provider and the investments. It has to meet the requirements of MiFIDII and PROD.      It's unlikely your choice would be theirs.   Some DIY providers are notorious for not providing data to the same level as intermediary providers as they don't have to.

 Their way of working is to sign you up for an ongoing service, which I don't want to do.

IFAs are not allowed to insist on ongoing servicing.   If you are seeing an IFA doing that then they are in breach of regulations.   However, FAs and Wealth managers do have business models that focus on that. 

And I seriously doubt that £3000 is a fair price to review my proposed plan. That's nearly a month's net salary for me!

£3000 to review your proposed plan is probably a passive blocker. They don't want to do it so they set a price high enough to put you off.  A lot of professions do that.    5-10 years ago, it would have been cheaper and easier.  Post MIFIDII and PROD, its a pain in the neck and more time consuming to do it.

LV_426

I notice Vanguard offer a personal financial planning service. Anyone used this? What do you reckon? 

https://www.vanguardinvestor.co.uk/financial-advice

I know they will only offer recommendations based on their products. But I was already thinking about using their Lifestyle plan anyway.

[Deleted User]

dunstonh said:

Deleted_User said:

“Some people appear not to like it that the performance on those, net of charges, can be fairly consistently better than the low cost options.”

Key words: “can be”.  Another good example of the kinds of statements that should trigger an “escape” signal.  Very similar to Tom’s second example: “You’re definitely paying too much if you’re told, “It doesn’t matter, it’s all about returns.”

What a load of BS.  That would pretty much eliminate any discussion on any investment.     Investment returns are always unknown.    You have to use the word "can" or similar because you do not know what the future holds. 

Indeed. Investment returns are unknown.  Charges are known though.  Which is why one should avoid advisors who strongly imply they will deliver better than market returns and that charges do not matter while using carefully coached language so they won’t be sued.  In reality advisers’ role isn’t delivery of “performance”.  The ones who tout “performance” are to be avoided. 

gm0

I did plan a review / DC healthcheck with an advice firm.  Their business model was pay only on acceptance of transfer recommendation to a new better/faster/cheaper product i.e. free if the advice was not to switch or if you don't accept the recommendation.  I was upfront about my DIY planning stage and my desire to test it against the "adviser introduced" market of platforms and funds that I would not have found in my DIY research.  I was also interested in what they would conclude about risk and portfolio shape based on my data and our interaction. 

I was genuinely interested to find an option with better managed (lower) volatility and good (enough) backtested returns vs my plan at a fair net fees cost. Not necessarily cheaper - better is good also - but bring data. Or to be more confident post the exercise that my plan was sound.  As a result - I have been shown the best offer readily available to this firm that they thought suited me - which may or may not be the very best - hard to prove that.

The model was one off initial charge at transfer.  Not compulsory ongoing service.  On the platform they offered me an advisor was needed for BCE events but if setup once and done you weren't locked in as I read it and most other things could be done by the customer.

I did not proceed with the offer.  Cost was £0 - just my time to prepare the data and conduct the calls.  And no tears for or from them - as I was upfront about where I was in the process and why I wanted to do it and they chose to proceed believing there was a workable possibility that they could come up with something compelling enough.  Business choice to incur cost of sales.

Based on the experience - some of what they had to prepare and present for compliance reasons as dusnstonh says was not very useful to me as it met a compliance need and assumptions used for that rather then being modeled specific to my full scenario but the recommendation - cost benchmark, portfolio shape, and other situational actions to take parts were all worthwhile for the time invested.

To be clear I am not recommending lying or otherwise abusing advisor presales processes but I am pointing out that this kind of "plan review" can be available if you go and look for it.  As with any advice firm the quality and attention to detail of the thinking and the advice provided is hostage to the skills and experience of the specific adviser you get allocated.

Given the level of disclosure and letter of authority process (if used) then you need to be suitably diligent about who you approach.  Offering something free upfront is sometimes a scam tactic to get you hooked into something bad (clone companies and other overseas unregulated scams of divers sorts.

gm0

To Vanguard advice.  Have not used.  (Use them as a DIY platform for S&S ISA).  It's very new and a bit corporate (for good and ill)

Hard to see why you would use them for advice if you hadn't already chosen Vanguard as consolidation destination.  And if you have decided that they are right for you - i.e. a company that you are happy to consoldate onto - reputation, scale, fair costs, adequate to *your* needs investment range - then their advice service becomes a "do it yourself" vs "pay to have it done/hand held" decision where the not inconsiderable fee is worth it to you or it's not - vs picking through the admin for your various pensions one by one yourself.

You can get a (slightly) cheaper SIPP elsewhere and hold Vanguard funds if you like them.  You can get a wider range elsewhere and that matters to you or it doesn't.  Or the advice introduced offers discussed in the thread above. 

Essentially the Vanguard is not for me decision is about whether you want a choice of gold and property funds and to play active and "pick a fund manager games - LindsellTrain, CGT, PNL, Scottish Mortgage Trust or a thousand others.  If you are largely low cost passive multi-asset in outlook maybe the rivals to LifeStrategy from BlackRock and HSBC appeal to you more.  Considerations are - home market bias (UK equities %),  Rebalancing approach (volatility managed approaches) vs the Vanguard one.

dunstonh

ajfielden said:

I notice Vanguard offer a personal financial planning service. Anyone used this? What do you reckon? 

https://www.vanguardinvestor.co.uk/financial-advice

It's a restricted service in both the type of advice it supplies and it's restricted to Vanguard products and funds.  Its ongoing advice charge is the same as most advisers.  it is just minus the initial charge.

I know they will only offer recommendations based on their products. But I was already thinking about using their Lifestyle plan anyway.

So there is no benefit to using their advice service.

[Deleted User]

ajfielden said:

I notice Vanguard offer a personal financial planning service. Anyone used this? What do you reckon? 

https://www.vanguardinvestor.co.uk/financial-advice

I know they will only offer recommendations based on their products. But I was already thinking about using their Lifestyle plan anyway.

The initial advice, being free, could be helpful. Your key decision is about asset allocation. The best approach is to educate yourself before making it. Second best - to seek advice. Once a good plan is executed, there should be minimal or no human involvement. Should run on an autopilot. 

LV_426

dunstonh said:

ajfielden said:

I notice Vanguard offer a personal financial planning service. Anyone used this? What do you reckon? 

https://www.vanguardinvestor.co.uk/financial-advice

It's a restricted service in both the type of advice it supplies and it's restricted to Vanguard products and funds.  Its ongoing advice charge is the same as most advisers.  it is just minus the initial charge.

I know they will only offer recommendations based on their products. But I was already thinking about using their Lifestyle plan anyway.

So there is no benefit to using their advice service.

Ongoing management? Have you actually gone to their website and looked at what they can provide?
For an 'all in' fee of 0.79% they are providing some kind of ongoing management service. How does that compare to the level of service I would get from say an IFA, like yourself?
0.79% (including platform charges) is less than an IFA would charge.

LV_426

Deleted_User said:

ajfielden said:

I notice Vanguard offer a personal financial planning service. Anyone used this? What do you reckon? 

https://www.vanguardinvestor.co.uk/financial-advice

I know they will only offer recommendations based on their products. But I was already thinking about using their Lifestyle plan anyway.

The initial advice, being free, could be helpful. Your key decision is about asset allocation. The best approach is to educate yourself before making it. Second best - to seek advice. Once a good plan is executed, there should be minimal or no human involvement. Should run on an autopilot. 

So I'm not actually clear about what these 'ongoing management fees' are all about. What is the advisor doing exactly once the plan is set up? I just want to know what I'm getting for my money that's all.

OldMusicGuy

ajfielden said:

So I'm not actually clear about what these 'ongoing management fees' are all about. What is the advisor doing exactly once the plan is set up? I just want to know what I'm getting for my money that's all.

You will never know. Some may do a lot, others do sweet FA. There have been several threads on here recently from people asking the forum to explain things about their pensions to them to them even though they are paying an IFA! 

The whole business model is against transparent charging and proving value for money. You have to go with them based on trust. It's a simple choice between taking some responsibility yourself or "trusting an expert".