Pension adviser...worth it?

Fu_Man_Chu

Hi, I've just had a pension adviser around and I'm unsure whether its worth all the fees to have my own bespoke adviser who will review and tailor my pension.

In summery she wants to charge me an initial fee of £4600 and then 1% thereafter. The fund she uses has out performed my current pension to the tune of £15900 over the last six years. If I add her 1% pa plus the set up fee it basically equates to being around £2400 better off with the pension advisors fund.

My work pension is about to move over to Lifesight in January. This seems to be a better managed fund than my old provider so I'm now thinking that with all the fees for the pension advisor I'd be no better off.

Obviously we don't have a crystal ball but thoughts please?

jim8888

I think those charges are breathtaking, considering what she'll advise you will be a fraction of the good advice you can glean from these boards for free. On the other hand, it's big responsibility - as I'm finding - managing pension finances on your own, and I can see the attraction of discussing with an "expert". Unfortunately the last IFA I spoke to was an utter balloon (provided via my work) and I just don't know how you'd find a really good one, partly because everybody's different. 

MaxiRobriguez

Not cheap, and "past performance is no guarantee of future success" should be considered.

Whether you actually need an advisor or not depends mainly on whether you can understand your risk tolerance well and how much money you actually have in the pot. A good advisor may stop you doing something dumb that prevents large losses, rather than eeks out small gains, and that might be worth it if your pot is sufficiently large enough (ie, six figures+).

Perhaps park it whilst you read this forum a bit more, get a bit more reading done on what options you have and then re-assess?

grimsalve

Fu_Man_Chu said:

In summery she wants to charge me an initial fee of £4600 and then 1% thereafter. The fund she uses has out performed my current pension to the tune of £15900 over the last six years. If I add her 1% pa plus the set up fee it basically equates to being around £2400 better off with the pension advisors fund.

How big is the pot?

Fu_Man_Chu

grimsalve said:

Fu_Man_Chu said:

In summery she wants to charge me an initial fee of £4600 and then 1% thereafter. The fund she uses has out performed my current pension to the tune of £15900 over the last six years. If I add her 1% pa plus the set up fee it basically equates to being around £2400 better off with the pension advisors fund.

How big is the pot?

Currently £161500

grimsalve

Fu_Man_Chu said:

grimsalve said:

Fu_Man_Chu said:

In summery she wants to charge me an initial fee of £4600 and then 1% thereafter. The fund she uses has out performed my current pension to the tune of £15900 over the last six years. If I add her 1% pa plus the set up fee it basically equates to being around £2400 better off with the pension advisors fund.

How big is the pot?

Currently £161500

Seems a bit steep IMO. Also, will her 1% annual fee be in addition to the fund charges?

Fu_Man_Chu

grimsalve said:

Fu_Man_Chu said:

grimsalve said:

Fu_Man_Chu said:

In summery she wants to charge me an initial fee of £4600 and then 1% thereafter. The fund she uses has out performed my current pension to the tune of £15900 over the last six years. If I add her 1% pa plus the set up fee it basically equates to being around £2400 better off with the pension advisors fund.

How big is the pot?

Currently £161500

Seems a bit steep IMO. Also, will her 1% annual fee be in addition to the fund charges?

Yup, £4600 initial fee and then 1% of the fund there after

MaxiRobriguez

So 2.8% charge upfront, followed by 1% every year. Yeah, not cheap, definitely on the expensive side.

The fund she has used beating your fund by £16k over six years which is 10% of your portfolio, or 1.6% a year annualised.

So, if that outperformance continued then you'd only start to see a real return (net of fees) after 8 years, and only then at 0.6% outperformance.

And that assumes she will continue to outperform.

Personally I'd rather spend 2-3 years learning everything I needed to know myself and then saving five years worth of costs.

Fu_Man_Chu

I think I'm going to transfer the lot to LifeSight and let them manage it for 0.55%. If it wasn't for the initial fee of £4600 Id be tempted but that seems very excessive for a pretty minimal pot

Parking_Trouble

Keep meaning to 'terminate' the IFA my wife used to transfer a DB pension into a Standard Life SIPP. 
In 3.5 years we've had a couple of letters from him to tell us it's all fine and nothing needs to change.
He has withdrawn finds for us 4 times.

Advisor charges are around 0.58% and Fund admin around 0.43% - Cant recall the exact %'ages.

So for doing very little the 'advisors' get a total of £2400 pa

Thrugelmir

Fu_Man_Chu said:

grimsalve said:

Fu_Man_Chu said:

In summery she wants to charge me an initial fee of £4600 and then 1% thereafter. The fund she uses has out performed my current pension to the tune of £15900 over the last six years. If I add her 1% pa plus the set up fee it basically equates to being around £2400 better off with the pension advisors fund.

How big is the pot?

Currently £161500

That's a relatively small pot to be paying a high proportion of fees on. Straightforward low cost options may prove better in the long term.