Will IFAs give you one-off advice without the ongoing review?

LV_426

dunstonh said:

I don't understand what you mean there as I don't believe any firm gives free advice.    If you are referring to the free initial consultation, that is not to give you free advice.  That is purely to meet and greet and ascertain if there is a business relationship going forward.   Its not for free advice.    Much the same as solicitors and accountants will give you the initial meeting without charge so it doesn't waste anyone time beyond that if it's unnecessary to continue. 

That free advice is what I mentioned in my previous post. That the advisor has gathered information about my current pension assets, reviewed it, given me advice on my early retirement plan, and come up with investment plans, which I can either take or not.
If I choose not to, then the advisor gets paid nothing.
This appears to be free advice. What's the catch?

Bianchiintenso

I had a free review done by a legacy advisor, what he proposed wasn't for me, so end of conversation. The catch is you, if you become his client. He gets his ongoing fees and you may end up better off, or you may end up worse off.

MX5huggy

There’s no catch, they are confident enough that the time and effort spent on each person will on average pay off for them. They probably won’t reveal all the details so you could DIY exactly the same 

AlanP_2

ajfielden said:

dunstonh said:

I don't understand what you mean there as I don't believe any firm gives free advice.    If you are referring to the free initial consultation, that is not to give you free advice.  That is purely to meet and greet and ascertain if there is a business relationship going forward.   Its not for free advice.    Much the same as solicitors and accountants will give you the initial meeting without charge so it doesn't waste anyone time beyond that if it's unnecessary to continue. 

That free advice is what I mentioned in my previous post. That the advisor has gathered information about my current pension assets, reviewed it, given me advice on my early retirement plan, and come up with investment plans, which I can either take or not.
If I choose not to, then the advisor gets paid nothing.
This appears to be free advice. What's the catch?

Not much different to any other business really, just pre-sales costs that they anticipate will be covered by the number of clients that take up the paid service. Same as a builder, plumber, interior designer etc. for consumer spends and any IT etc. company responding to bid requests from potential clients.

It may not give you the advice you need though, particularly if you are looking for "am I on track, what else could I do" type advice. More likely an asset summary / asset allocation for the funds they can offer and the costs.

Bobziz

OP have you posted your plans on this site for opinions ? Lots of very knowledgeable people who may be able to go some way to providing the assurance that you're looking for. 

LV_426

The IFA sent me a letter of authority, which is fine. However this letter also includes a statement to transfer all servicing rights to them. So am I right in thinking this would then start to pay them any trail commission/fees etc associated with the pension fund?

dunstonh

ajfielden said:

dunstonh said:

I don't understand what you mean there as I don't believe any firm gives free advice.    If you are referring to the free initial consultation, that is not to give you free advice.  That is purely to meet and greet and ascertain if there is a business relationship going forward.   Its not for free advice.    Much the same as solicitors and accountants will give you the initial meeting without charge so it doesn't waste anyone time beyond that if it's unnecessary to continue. 

That free advice is what I mentioned in my previous post. That the advisor has gathered information about my current pension assets, reviewed it, given me advice on my early retirement plan, and come up with investment plans, which I can either take or not.
If I choose not to, then the advisor gets paid nothing.
This appears to be free advice. What's the catch?

Well, that adviser is foolish.  Perhaps they had an FA background rather than an IFA one (FAs traditionally worked that way).   I have a couple of ex FAs working for me and I have been trying to bash that mentality out of them for years. 

Generally speaking, you discuss things at no cost up to a point and then you get to a stage where you either pay going forward or you call it a day.   Experienced IFAs know what they are likely to do long before it gets to that stage and won't need to present the outcome.  You only get it if you decide to proceed.   Inexperienced advisers or those that lack confidence may feel the need to go further.   Or may have the need from their employer to get the business and will disclose whatever is necessary to get you as a client.   Not ideal but those starting out won't have the luxury that experienced established advisers have.

Thanks. I can see that some people would want to hand over all financial planning to an IFA and be completely hands off. That's fair enough. But my situation is that I do have some knowledge, and have a good idea of retirement planning. But it's the old conundrum - I don't know what I don't know. And this is really what I'm looking to a financial advisor for. Some level of confidence that the plans I have in my mind are the best way forward.

Part of this problem is thanks to the EU.   The MiFIDII directive effectively tried to standardise the process across the EU.  It overly formalised a process that may suit city workers but is totally over the top and unnecessary for the average consumer.   It also brought in requirements that were very much product and investment focused and many firms have decided to strictly adhere to that and don't want people that don't want that.    i.e. the advice is not just on what you should do but how you should do it and there should be an audit trail and due diligence carried out on that.   

The FCA, which implements EU directives and gold plates them, has also stated that it expects all advisers working for a firm to work using the same processes.  So, larger advice firms will dictate what their advisers can and cannot do.   This includes networks with member firms (i.e. all member firms have to do what the network tells them to do).   So, often it's only the smaller traditional directly authorised IFA firms where you will find a bit more freedom to do things differently.

dunstonh

ajfielden said:

The IFA sent me a letter of authority, which is fine. However this letter also includes a statement to transfer all servicing rights to them. So am I right in thinking this would then start to pay them any trail commission/fees etc associated with the pension fund?

No.  
Plus most pensions don't pay any trail commission.  Only those holding unit trusts/OEICs in retail share classes from before 2013 pay trail.   If you are using clean share classes than there is no trail.

the main advantage of servicing rights is that most providers can port data into the back office software of the provider.  It can take away hours from manually finding funds and typing in unit data for each fund.

[Deleted User]

ajfielden said:

The IFA sent me a letter of authority, which is fine. However this letter also includes a statement to transfer all servicing rights to them. So am I right in thinking this would then start to pay them any trail commission/fees etc associated with the pension fund?

I don’t know the answer so its just a guess… But surely you can take the advice, pay the fee, listen what he has to say on asset allocation etc and then terminate the relationship and do your own thing.  Obviously don’t pick anything with trail commissions.  He can’t service what he can’t access, nor can he charge for it. 

Having said this, would ask for complete transparency on fees.   He is obliged to provide that info and any caginess = “run away”. 

Toucan13

To access fixed fee advice there is a list of independent advisers on the Boring Money site where you can filter for fixed fees

I haven't used this personally yet but had in my mind I might explore when I'm finally ready to throw in the working towel.

Find an adviser - Boring Money (boringmoneyadvice.co.uk)