Why is the cost of advice so high?

LV_426

I'm pondering whether to consult an IFA for advice on pension consolidation issues.
I just really baulk at the cost though. Someone I just spoke to wants £4k - £5k for a review and advice on where to put my money.
I'm quite willing to pay for advice, but come on, this is eye wateringly expensive!

Marcon

ajfielden said:

I'm pondering whether to consult an IFA for advice on pension consolidation issues.
I just really baulk at the cost though. Someone I just spoke to wants £4k - £5k for a review and advice on where to put my money.
I'm quite willing to pay for advice, but come on, this is eye wateringly expensive!

Two possibilities: either they think your pensions include DB pensions and you want advice on those (do you?) and/or they don't much want you as a client for whatever reason and are sending a not so subtle message by pricing themselves so high that you'll go elsewhere.

Most initial meetings with an IFA are free, to establish what exactly you are seeking and whether you and the IFA are a 'good fit'. You might get different fee quotes if you follow that path.

TadleyBaggie

Does sound high. My IFA did a free face to face review, I then agreed for him to proceed with the consolidation work which was around £2K. This was 5 private pensions and an AVC. It did not include my DB pension.

LV_426

TadleyBaggie said:

Does sound high. My IFA did a free face to face review, I then agreed for him to proceed with the consolidation work which was around £2K. This was 5 private pensions and an AVC. It did not include my DB pension.

My situation is very similar. Can you send me details of who you worked with please?

eskbanker

At least some of the cost will be proportional to the collective size of the pots and the associated risks, so, as often pointed out by IFAs on here, a single £4/5K figure needs context, i.e. it would be high for £50K of assets but less so for £1m....

TadleyBaggie

ajfielden said:

My situation is very similar. Can you send me details of who you worked with please?

He's effectively retired now and not taking on new business I'm afraid.

LV_426

I've been on the Unbiased website, and their whole method of finding an advisor now seems to have changed. Previously you could pick from a list of presented advisors. Now you just go through a multi click process and they spit out someone they chose for you. I've done it twice now, and it came back with the same people both times.

eskbanker

https://www.moneysavingexpert.com/savings/best-financial-advisers/ offers guidance on selecting IFAs, including another index site....

dunstonh

FAs and wealth managers tend to be more expensive as they typically charge a flat percentage against the amount with little or no tapering or cap.      General practitioner IFAs tend to be cheaper but there are always exceptions.  Some adviser firms are just greedy just as the same as every profession.

I've been on the Unbiased website, and their whole method of finding an advisor now seems to have changed. Previously you could pick from a list of presented advisors. Now you just go through a multi click process and they spit out someone they chose for you. I've done it twice now, and it came back with the same people both times.

Unbiased is no longer an IFA directory.  it is a lead generation site and they include FAs as well as IFAs.  Most of the IFA firms I know (as in talk to their owners/directors frequently) have stopped paying to be listed on unbiased (myself included).  One of the other big lead generation sites that masquerade as a directory tried to get us listed with them and they wanted a big chunk of any initial fee income of any client that signs up via them.    The only way to make that viable would have been to double the fee.    And that can be one of the problems of using lead generation/directory sites.      Most of the firms I see on that site are new advisers just starting out or those that give the impression they are short of clients.

Many years ago, an adviser laughed at me as he charged a high percentage amount and only needed 1/10th of the clients I needed to earn the same amount.   He got away with it because of sufficient numbers willing to pay silly amounts.   Its common in all walks of life.

LV_426

dunstonh said:

FAs and wealth managers tend to be more expensive as they typically charge a flat percentage against the amount with little or no tapering or cap.      General practitioner IFAs tend to be cheaper but there are always exceptions.  Some adviser firms are just greedy just as the same as every profession.

I've been on the Unbiased website, and their whole method of finding an advisor now seems to have changed. Previously you could pick from a list of presented advisors. Now you just go through a multi click process and they spit out someone they chose for you. I've done it twice now, and it came back with the same people both times.

Unbiased is no longer an IFA directory.  it is a lead generation site and they include FAs as well as IFAs.  Most of the IFA firms I know (as in talk to their owners/directors frequently) have stopped paying to be listed on unbiased (myself included).  One of the other big lead generation sites that masquerade as a directory tried to get us listed with them and they wanted a big chunk of any initial fee income of any client that signs up via them.    The only way to make that viable would have been to double the fee.    And that can be one of the problems of using lead generation/directory sites.      Most of the firms I see on that site are new advisers just starting out or those that give the impression they are short of clients.

Many years ago, an adviser laughed at me as he charged a high percentage amount and only needed 1/10th of the clients I needed to earn the same amount.   He got away with it because of sufficient numbers willing to pay silly amounts.   Its common in all walks of life.

Do you ever work with members on here dunstonh?

westv

dunstonh said:

Unbiased is no longer an IFA directory.  it is a lead generation site and they include FAs as well as IFAs.  Most of the IFA firms I know (as in talk to their owners/directors frequently) have stopped paying to be listed on unbiased (myself included).  One of the other big lead generation sites that masquerade as a directory tried to get us listed with them and they wanted a big chunk of any initial fee income of any client that signs up via them.    The only way to make that viable would have been to double the fee.    And that can be one of the problems of using lead generation/directory sites.      Most of the firms I see on that site are new advisers just starting out or those that give the impression they are short of clients.

So where does one go now to find local IFAs? Yell?