Parmenion SIPP Provider

segovia

dunstonh said:

 All the more reason she can't afford an IFA, the risk profiling exercise would probably end up with her portfolio being in very low risk, low return  government bonds in which case the IFA and associates would be taking more than 50% of any profits. 

You appear to have a very low expectation on returns if that is the case.  Thankfully, that is not the reality.

Yes, very low expectations, a low-risk portfolio means low returns in my experience. Low returns combined with a static investment strategy do not warrant the retention of an IFA's services as the ratio between the IFA charges and the ROI becomes unbalanced in the IFA's favour  

dunstonh

segovia said:

dunstonh said:

 All the more reason she can't afford an IFA, the risk profiling exercise would probably end up with her portfolio being in very low risk, low return  government bonds in which case the IFA and associates would be taking more than 50% of any profits. 

You appear to have a very low expectation on returns if that is the case.  Thankfully, that is not the reality.

Yes, very low expectations, a low-risk portfolio means low returns in my experience. Low returns combined with a static investment strategy do not warrant the retention of an IFA's services as the ratio between the IFA charges and the ROI becomes unbalanced in the IFA's favour  

Not in my over 25 years of experience.  Typical IFA cost is 0.5%.   So, you are only expecting about 1% a year.  Maybe you should stick with cash at that rate.    Whereas the lower risk stuff has been mostly circa 5% for the last 20 or so years.

It's only really since 2013 that you could remove the ongoing adviser cost if you wanted.   Prior to that it was retained mostly or fully by the providers/platforms if there was no adviser.

segovia

Albermarle said:

segovia said:

The IFA fees are .7%, £1,400.00 

Reading the sales pitch the investments are Discretionary Managed Funds and the platform is for advisors only  

I am therefore of the opinion the .7% is an introduction/commission fee paid annually 

Introduction and commission fees are not allowed .

When you employ an IFA , it can be for various reasons and they can help in various areas , not just designing an investment portfolio. For example on tax matters, general family finance issues etc 
In this case it seems they have delegated managing the investments to a DFM . In which case you would hope the IFA would reduce their fee, but some seem not to .

My wife is discussing a DB transfer with an IFA who has moved many of her colleagues DB pensions. The IFA who is giving the advice is not qualified to process DB transfers, they sub contract it to another company which I think is Pensionwise.co.uk. The last time my wife spoke to Pensionwise to confirm costs the person she spoke to said it would cost £5,000.00 to trasfer if she could get the orginal IFA to waiver their £5,000.00 intruducers fee, else it would be £10,000.00 to move her DB. If what you say is correct the IFA is acting unlawfully in regarda to industry regulations. Would you agree ?  

Peter314

segovia said:

Albermarle said:

segovia said:

The IFA fees are .7%, £1,400.00 

Reading the sales pitch the investments are Discretionary Managed Funds and the platform is for advisors only  

I am therefore of the opinion the .7% is an introduction/commission fee paid annually 

Introduction and commission fees are not allowed .

When you employ an IFA , it can be for various reasons and they can help in various areas , not just designing an investment portfolio. For example on tax matters, general family finance issues etc 
In this case it seems they have delegated managing the investments to a DFM . In which case you would hope the IFA would reduce their fee, but some seem not to .

My wife is discussing a DB transfer with an IFA who has moved many of her colleagues DB pensions. The IFA who is giving the advice is not qualified to process DB transfers, they sub contract it to another company which I think is Pensionwise.co.uk. The last time my wife spoke to Pensionwise to confirm costs the person she spoke to said it would cost £5,000.00 to trasfer if she could get the orginal IFA to waiver their £5,000.00 intruducers fee, else it would be £10,000.00 to move her DB. If what you say is correct the IFA is acting unlawfully in regarda to industry regulations. Would you agree ?  

You mentioned that "my wife likes 100% guarantees, very very very low risk". Her DB pension provides this but a DC pension would not. Why is she so keen to transfer?

Alexland

dunstonh said:

Not in my over 25 years of experience.  Typical IFA cost is 0.5%.   So, you are only expecting about 1% a year.  Maybe you should stick with cash at that rate.    Whereas the lower risk stuff has been mostly circa 5% for the last 20 or so years.

How much is that down to the last few decades of lowering interest rates and increasing bond valuations? Do you expect 5% on a low risk portfolio to continue and if so what asset classes are such returns going to come from?

segovia

Peter314 said:

segovia said:

Albermarle said:

segovia said:

The IFA fees are .7%, £1,400.00 

Reading the sales pitch the investments are Discretionary Managed Funds and the platform is for advisors only  

I am therefore of the opinion the .7% is an introduction/commission fee paid annually 

Introduction and commission fees are not allowed .

When you employ an IFA , it can be for various reasons and they can help in various areas , not just designing an investment portfolio. For example on tax matters, general family finance issues etc 
In this case it seems they have delegated managing the investments to a DFM . In which case you would hope the IFA would reduce their fee, but some seem not to .

My wife is discussing a DB transfer with an IFA who has moved many of her colleagues DB pensions. The IFA who is giving the advice is not qualified to process DB transfers, they sub contract it to another company which I think is Pensionwise.co.uk. The last time my wife spoke to Pensionwise to confirm costs the person she spoke to said it would cost £5,000.00 to trasfer if she could get the orginal IFA to waiver their £5,000.00 intruducers fee, else it would be £10,000.00 to move her DB. If what you say is correct the IFA is acting unlawfully in regarda to industry regulations. Would you agree ?  

You mentioned that "my wife likes 100% guarantees, very very very low risk". Her DB pension provides this but a DC pension would not. Why is she so keen to transfer?

Its not decided, she wants the best of both worlds. We discussed this 5 years ago and I was in favour of her keeping the DB scheme, she wanted to transfer with the intention of being able to leave something to our daughter. My view was its a pension not an insurance policy. However, at the time my daughter was at University and we didn't know at the time she would end up in a low paid profession (Childcare)  - Her boyfriend is also in a low paid job. The reality is we are are now more likely to need to fund a house purchase for them or provide something for them in the future which. Being in control of all of our pensions i/ finances is more attractive proposition than a regular DB income.  

segovia

Alexland said:

dunstonh said:

Not in my over 25 years of experience.  Typical IFA cost is 0.5%.   So, you are only expecting about 1% a year.  Maybe you should stick with cash at that rate.    Whereas the lower risk stuff has been mostly circa 5% for the last 20 or so years.

How much is that down to the last few decades of lowering interest rates and increasing bond valuations? Do you expect 5% on a low risk portfolio to continue and if so what asset classes are such returns going to come from?

Historical return on a low risk portfolio 6.1%, Platform, Fund Management, IFA charges  would be circa 2%, the maths don't stack up for me, giving away 33% of a  return doesn't make sense.  

dunstonh

How much is that down to the last few decades of lowering interest rates and increasing bond valuations? Do you expect 5% on a low risk portfolio to continue and if so what asset classes are such returns going to come from?

I try to avoid predicting the unpredictable.   However, gilts and fixed interest security funds go up in value when interest rates are falling or perceived to fall.   They tend to fall in value when interest rates rise or are perceived to rise.    Looking ahead, it is unlikely they are going to fall.   Its more a case of when they are likely to rise.

Anyone who is heavy in gilts/bonds should not "expect" the next decade to be as good as the last.  (but as its unpredictable, it may or may not pan out like that. I would plan for the worse and hope for the best rather than plan for the best)