Why is the cost of advice so high?

LV_426

Albermarle said:

LV_426 said:

BritishInvestor said:

LV_426 said:

I think I have a promising way forward here. Had a conversation this morning with an IFA recommended by a friend. I was left with a good feeling about him, and have arranged further discussion.
Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

A one-man band or just someone that isn't part of a national group?

One man band. Sounds like he has enough regular clients to bring in a solid income. And of course being self employed is a huge advantage (for me anyway, in terms of fees).

I would have thought that a small group of IFA's ( 3 or 4 ) sharing an office and some admin/IT costs would actually be more cost efficient than a one man band ?
Also they can cover for each other in case of illness, holidays etc

I guess it depends. Say you have 100 clients, paying £750/year for ongoing support. Guaranteed £75k/year income. Plus new clients requiring financial planning and advice, for which you can charge more.
As a single self-employed person, your overheads are very minimal.

pip895

LV_426 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!

Do you even need advise for this work?  My OH had 5 pensions when he retired and we made the decision to consolidate them in a SIPP.  I just rang up Hargreaves Lansdown, filled in a few forms and let them pull everything in.  It was all very painless.  They flagged up that one of the pensions had a guaranteed tax free amount of 55% so that wasn't transferred but the other 4 turned up over a period of a few weeks.  

The HL advisors we dealt with were FAs rather than IFAs I suppose but I wasn't asking for investment advise so I don't see that that matters - they were very efficient at dealing with a wide range of pension companies.  We ended up with a SIPP on their platform and if you use funds they are not the cheapest option, but there were no other costs.  I assume other platforms will perform a similar process.  In any case there is nothing to stop you waiting a year and then moving the consolidated SIPP if that's what you want.. 

LV_426

pip895 said:

LV_426 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!

Do you even need advise for this work?  

Yes, if it's at a reasonable cost. I've already seen that charges vary considerably, depending on who you deal with.

BritishInvestor

LV_426 said:

Albermarle said:

LV_426 said:

BritishInvestor said:

LV_426 said:

I think I have a promising way forward here. Had a conversation this morning with an IFA recommended by a friend. I was left with a good feeling about him, and have arranged further discussion.
Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

A one-man band or just someone that isn't part of a national group?

One man band. Sounds like he has enough regular clients to bring in a solid income. And of course being self employed is a huge advantage (for me anyway, in terms of fees).

I would have thought that a small group of IFA's ( 3 or 4 ) sharing an office and some admin/IT costs would actually be more cost efficient than a one man band ?
Also they can cover for each other in case of illness, holidays etc

I guess it depends. Say you have 100 clients, paying £750/year for ongoing support. Guaranteed £75k/year income. Plus new clients requiring financial planning and advice, for which you can charge more.
As a single self-employed person, your overheads are very minimal.

I'm not sure what you'd expect to get for £750 a year, but it would be unlikely to be much financial planning. Even Vanguard (known as being reasonable value) ask for £750k*0.5%pa to have a dedicated financial planner relationship.

https://www.vanguardinvestor.co.uk/financial-advice

I guess an adviser could run a service from his bedroom and keep overheads to a minimum, but if you want to provide a decent service for 100 clients (especially if you are taking on new ones), then you're probably going to have to pay for various items over and above the regulatory fees, including software, staff, ongoing training, office space etc.

LV_426

BritishInvestor said:

LV_426 said:

Albermarle said:

LV_426 said:

BritishInvestor said:

LV_426 said:

I think I have a promising way forward here. Had a conversation this morning with an IFA recommended by a friend. I was left with a good feeling about him, and have arranged further discussion.
Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

A one-man band or just someone that isn't part of a national group?

One man band. Sounds like he has enough regular clients to bring in a solid income. And of course being self employed is a huge advantage (for me anyway, in terms of fees).

I would have thought that a small group of IFA's ( 3 or 4 ) sharing an office and some admin/IT costs would actually be more cost efficient than a one man band ?
Also they can cover for each other in case of illness, holidays etc

I guess it depends. Say you have 100 clients, paying £750/year for ongoing support. Guaranteed £75k/year income. Plus new clients requiring financial planning and advice, for which you can charge more.
As a single self-employed person, your overheads are very minimal.

I'm not sure what you'd expect to get for £750 a year, but it would be unlikely to be much financial planning. Even Vanguard (known as being reasonable value) ask for £750k*0.5%pa to have a dedicated financial planner relationship.

https://www.vanguardinvestor.co.uk/financial-advice

I guess an adviser could run a service from his bedroom and keep overheads to a minimum, but if you want to provide a decent service for 100 clients (especially if you are taking on new ones), then you're probably going to have to pay for various items over and above the regulatory fees, including software, staff, ongoing training, office space etc.

£750 was a number I'd seen somewhere in the service charges. I agree that wouldn't cover much, and will be a topic of discussion when I meet with the advisor. By 'financial planning' I was meaning the initial in depth work, involving analysis of my current arrangements, cash flow etc, which of course I would expect to pay more than that.
Providing my pensions are consolidated and set up in a suitable platform I'm pretty sure I could be in a position to manage it myself, going forward.

BritishInvestor

LV_426 said:

BritishInvestor said:

LV_426 said:

Albermarle said:

LV_426 said:

BritishInvestor said:

LV_426 said:

I think I have a promising way forward here. Had a conversation this morning with an IFA recommended by a friend. I was left with a good feeling about him, and have arranged further discussion.
Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

A one-man band or just someone that isn't part of a national group?

One man band. Sounds like he has enough regular clients to bring in a solid income. And of course being self employed is a huge advantage (for me anyway, in terms of fees).

I would have thought that a small group of IFA's ( 3 or 4 ) sharing an office and some admin/IT costs would actually be more cost efficient than a one man band ?
Also they can cover for each other in case of illness, holidays etc

I guess it depends. Say you have 100 clients, paying £750/year for ongoing support. Guaranteed £75k/year income. Plus new clients requiring financial planning and advice, for which you can charge more.
As a single self-employed person, your overheads are very minimal.

I'm not sure what you'd expect to get for £750 a year, but it would be unlikely to be much financial planning. Even Vanguard (known as being reasonable value) ask for £750k*0.5%pa to have a dedicated financial planner relationship.

https://www.vanguardinvestor.co.uk/financial-advice

I guess an adviser could run a service from his bedroom and keep overheads to a minimum, but if you want to provide a decent service for 100 clients (especially if you are taking on new ones), then you're probably going to have to pay for various items over and above the regulatory fees, including software, staff, ongoing training, office space etc.

£750 was a number I'd seen somewhere in the service charges. I agree that wouldn't cover much, and will be a topic of discussion when I meet with the advisor. By 'financial planning' I was meaning the initial in depth work, involving analysis of my current arrangements, cash flow etc, which of course I would expect to pay more than that.
Providing my pensions are consolidated and set up in a suitable platform I'm pretty sure I could be in a position to manage it myself, going forward.

If you are just looking for a piece of transactional work, I would struggle to see the value in a one-off cashflow planning exercise (the financial plan being inevitably wrong and out of date as life inevitably changes).

Similarly, if you are happy to manage things yourself going forward, what stops you from doing the initial work yourself and saving some money if that's the priority?

LV_426

BritishInvestor said:

LV_426 said:

BritishInvestor said:

LV_426 said:

Albermarle said:

LV_426 said:

BritishInvestor said:

LV_426 said:

I think I have a promising way forward here. Had a conversation this morning with an IFA recommended by a friend. I was left with a good feeling about him, and have arranged further discussion.
Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

A one-man band or just someone that isn't part of a national group?

One man band. Sounds like he has enough regular clients to bring in a solid income. And of course being self employed is a huge advantage (for me anyway, in terms of fees).

I would have thought that a small group of IFA's ( 3 or 4 ) sharing an office and some admin/IT costs would actually be more cost efficient than a one man band ?
Also they can cover for each other in case of illness, holidays etc

I guess it depends. Say you have 100 clients, paying £750/year for ongoing support. Guaranteed £75k/year income. Plus new clients requiring financial planning and advice, for which you can charge more.
As a single self-employed person, your overheads are very minimal.

I'm not sure what you'd expect to get for £750 a year, but it would be unlikely to be much financial planning. Even Vanguard (known as being reasonable value) ask for £750k*0.5%pa to have a dedicated financial planner relationship.

https://www.vanguardinvestor.co.uk/financial-advice

I guess an adviser could run a service from his bedroom and keep overheads to a minimum, but if you want to provide a decent service for 100 clients (especially if you are taking on new ones), then you're probably going to have to pay for various items over and above the regulatory fees, including software, staff, ongoing training, office space etc.

£750 was a number I'd seen somewhere in the service charges. I agree that wouldn't cover much, and will be a topic of discussion when I meet with the advisor. By 'financial planning' I was meaning the initial in depth work, involving analysis of my current arrangements, cash flow etc, which of course I would expect to pay more than that.
Providing my pensions are consolidated and set up in a suitable platform I'm pretty sure I could be in a position to manage it myself, going forward.

If you are just looking for a piece of transactional work, I would struggle to see the value in a one-off cashflow planning exercise (the financial plan being inevitably wrong and out of date as life inevitably changes).

Similarly, if you are happy to manage things yourself going forward, what stops you from doing the initial work yourself and saving some money if that's the priority?

Well my first question is, I have 6 DC pension plans. What's the best thing to do with them?

a) Do nothing, leave them as is
b) Transfer them all into one of the existing funds
c) Combination of a) and b)
d) Transfer some or all of them to an entirely new fund/platform

Any advisor I've approached wants to go through an initial meet and greet, then asks for information about my current assets and income/expenditure. So we're immediately into a planning/analysis exercise. Obviously with costs involved.

No professional advisor wants to answer my specific question. They all want to draw me into an ongoing relationship. Absolutely nobody I've talked to will do a one off piece of work as you suggest.

dunstonh

Any advisor I've approached wants to go through an initial meet and greet, then asks for information about my current assets and income/expenditure. So we're immediately into a planning/analysis exercise. Obviously with costs involved.

You typically find the initial free meeting is a getting to know you meeting along with some basic information to see whether it is mutually beneficial to proceed or not.

No professional advisor wants to answer my specific question. They all want to draw me into an ongoing relationship. Absolutely nobody I've talked to will do a one off piece of work as you suggest.

It is a mandatory requirement for it to be available and it's your choice to use it or not.  However, some business models are based on wealth management which is effectively an ongoing servicing model.   So, if you approach an adviser firm with that model, then you should pretty much expect them to focus on that model.

And no adviser should be answering your specific question at that stage as it's an advice question and needs the audit trail to support it.  

Thrugelmir

LV_426 said:

Albermarle said:

LV_426 said:

BritishInvestor said:

LV_426 said:

I think I have a promising way forward here. Had a conversation this morning with an IFA recommended by a friend. I was left with a good feeling about him, and have arranged further discussion.
Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

A one-man band or just someone that isn't part of a national group?

One man band. Sounds like he has enough regular clients to bring in a solid income. And of course being self employed is a huge advantage (for me anyway, in terms of fees).

I would have thought that a small group of IFA's ( 3 or 4 ) sharing an office and some admin/IT costs would actually be more cost efficient than a one man band ?
Also they can cover for each other in case of illness, holidays etc

I guess it depends. Say you have 100 clients, paying £750/year for ongoing support. Guaranteed £75k/year income. Plus new clients requiring financial planning and advice, for which you can charge more.
As a single self-employed person, your overheads are very minimal.

Sounds so simple. Where I can buy such a business off the shelf? 

BritishInvestor

LV_426 said:

BritishInvestor said:

LV_426 said:

BritishInvestor said:

LV_426 said:

Albermarle said:

LV_426 said:

BritishInvestor said:

LV_426 said:

I think I have a promising way forward here. Had a conversation this morning with an IFA recommended by a friend. I was left with a good feeling about him, and have arranged further discussion.
Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

A one-man band or just someone that isn't part of a national group?

One man band. Sounds like he has enough regular clients to bring in a solid income. And of course being self employed is a huge advantage (for me anyway, in terms of fees).

I would have thought that a small group of IFA's ( 3 or 4 ) sharing an office and some admin/IT costs would actually be more cost efficient than a one man band ?
Also they can cover for each other in case of illness, holidays etc

I guess it depends. Say you have 100 clients, paying £750/year for ongoing support. Guaranteed £75k/year income. Plus new clients requiring financial planning and advice, for which you can charge more.
As a single self-employed person, your overheads are very minimal.

I'm not sure what you'd expect to get for £750 a year, but it would be unlikely to be much financial planning. Even Vanguard (known as being reasonable value) ask for £750k*0.5%pa to have a dedicated financial planner relationship.

https://www.vanguardinvestor.co.uk/financial-advice

I guess an adviser could run a service from his bedroom and keep overheads to a minimum, but if you want to provide a decent service for 100 clients (especially if you are taking on new ones), then you're probably going to have to pay for various items over and above the regulatory fees, including software, staff, ongoing training, office space etc.

£750 was a number I'd seen somewhere in the service charges. I agree that wouldn't cover much, and will be a topic of discussion when I meet with the advisor. By 'financial planning' I was meaning the initial in depth work, involving analysis of my current arrangements, cash flow etc, which of course I would expect to pay more than that.
Providing my pensions are consolidated and set up in a suitable platform I'm pretty sure I could be in a position to manage it myself, going forward.

If you are just looking for a piece of transactional work, I would struggle to see the value in a one-off cashflow planning exercise (the financial plan being inevitably wrong and out of date as life inevitably changes).

Similarly, if you are happy to manage things yourself going forward, what stops you from doing the initial work yourself and saving some money if that's the priority?

Well my first question is, I have 6 DC pension plans. What's the best thing to do with them?

a) Do nothing, leave them as is
b) Transfer them all into one of the existing funds
c) Combination of a) and b)
d) Transfer some or all of them to an entirely new fund/platform

Any advisor I've approached wants to go through an initial meet and greet, then asks for information about my current assets and income/expenditure. So we're immediately into a planning/analysis exercise. Obviously with costs involved.

No professional advisor wants to answer my specific question. They all want to draw me into an ongoing relationship. Absolutely nobody I've talked to will do a one off piece of work as you suggest.

"I have 6 DC pension plans. What's the best thing to do with them?"

In my experience, that might seem the initial priority, but after a bit of digging it's very rarely about the money - more something like "I hate my job and want to finish asap, is that possible?" which is obviously a much bigger question and comes with associated time and costs.

However, even if you are convinced you just want a one-off pension consolidation exercise (and skipping the time consuming financial planning stage), you'd still need to go through a fact find exercise etc - you can't really avoid that. 

It might be worth posting your question on Boring Money and seeing if you have any luck. Maybe a younger adviser who is relatively early on their journey and has capacity might be interested.

https://www.boringmoney.co.uk/ask/how-do-i-find-a-financial-adviser-for-a-one-off-review-of-my-plans/