IFA Fees....

jimjames

 cChainsawCharlie said:

So moving on, I have had talks with another IFA  who seems to be the best yet.
She has looked at the whole retirement situation and is looking at all my finances, not just the pension. And seems really proactive as she has talked about the whole retirement path, throughout retirement as we age.

Proposal is to:

1) Move entire 175,000 Pension away from Aviva to a Standard Life platform, as they offer more funds and a better way of moving money about.

2) Invest my £158,000 savings into a Prufund Growth fund, instead of me relying on basic cash Isa's or fixed savers averaging just 1% interest.

It certainly makes sense to look at the overall picture not just one part of it like the pension. However by including the additional cash savings balances in the fees the IFA has now managed to make the fees look more attractive as they're based over a higher total. I'd be wary about taking money out of the ISAs which is presumably what is being proposed. You could keep the ISA tax free wrapper but move some of it to low risk, low cost funds in a S&S ISA rather than keeping as cash. That gives the benefit of additional tax free income (income from ISA is not taxable regardless of your tax rate)

How much cash is she proposing for you to keep as pure cash that's instantly accessible?

Linton

jimjames said:

 cChainsawCharlie said:

So moving on, I have had talks with another IFA  who seems to be the best yet.
She has looked at the whole retirement situation and is looking at all my finances, not just the pension. And seems really proactive as she has talked about the whole retirement path, throughout retirement as we age.

Proposal is to:

1) Move entire 175,000 Pension away from Aviva to a Standard Life platform, as they offer more funds and a better way of moving money about.

2) Invest my £158,000 savings into a Prufund Growth fund, instead of me relying on basic cash Isa's or fixed savers averaging just 1% interest.

It certainly makes sense to look at the overall picture not just one part of it like the pension. However by including the additional cash savings balances in the fees the IFA has now managed to make the fees look more attractive as they're based over a higher total. I'd be wary about taking money out of the ISAs which is presumably what is being proposed. You could keep the ISA tax free wrapper but move some of it to low risk, low cost funds in a S&S ISA rather than keeping as cash. That gives the benefit of additional tax free income (income from ISA is not taxable regardless of your tax rate)

How much cash is she proposing for you to keep as pure cash that's instantly accessible?

Losing an ISA wrap is a good point.  But Standard Life operate S&S ISAs, so there is no reason to lose it.  However we dont know how much of the £158K is in ISAs.

jimjames

ChainsawCharlie said:

Thanks to jimjames too, hopefully my answer above answers your reply too mate:-)

No worries, is the proposal for the ISAs to remain in the tax wrapper or will that be lost when moved to Pru? For long term money it might make sense to get the maximum into ISAs each year so you have that income tax free

Linton

ChainsawCharlie said:

jimjames said:

ChainsawCharlie said:

Thanks to jimjames too, hopefully my answer above answers your reply too mate:-)

No worries, is the proposal for the ISAs to remain in the tax wrapper or will that be lost when moved to Pru? For long term money it might make sense to get the maximum into ISAs each year so you have that income tax free

Thanks Jim, I must admit we have been taking out of ISA's recently after they have matured and putting into fixed savers which offered better interest rates  but only because we both have reasonable amount of our £1000 per year tax allowance.
If we need isa's again in future we can put £40,000 back quite easily £20,000 for the wife and £20,000 for me.
The IFA who saw us yesterday wasn't keen on ISA's.

Cash ISAs are not very good but S&S ISAs are very useful if you are investing outside a pension. Apart from any tax savings they have the advantage that you dont have to keep tax records on your fund dealings for 7 years.  I assume it is the cash savings  rather than the ISA tax shelter that the IFA wasnt keen on.

Diplodicus

ChainsawCharlie said:

To be honest our heads are minced up at the moment :-)

Evidently.  Whether you splurge 500 or 5000 on financial advice , you have considered the argument for either, so the only thing left to say is good luck with your choice.

MK62

eskbanker said:

ChainsawCharlie said:

And if I was to give the go ahead what would you advise I should request in terms of a return on investment  in otherwords should IFA put in writing what they have agreed to do and what return the expect from the funds proposed.

The conversation should be the other way round, i.e. you should be outlining your objectives, in terms of how much money you believe you'll need and when, and only then should the IFA be proposing an investment strategy that stands the best chance of meeting this.

.....or tell you that your plans are unrealistic and perhaps save you from a later life of penury......."but the bloke in the pub said 8%pa would be OK"...