Pension Advice and Consolidation

chipfork

Apologies, I have a few questions which may have been covered before. I have had a session with Pension Wise and have been reading as much as I can.
For background, We've let our pension provisions trundle along with out too much thought or interaction, until now. We're in our early 50's and we both have a workplace DB scheme. We also have a number of DC schemes that we'd like to consolidate.

1. As unbiased.co.uk is listed on many of the government web sites I thought I would make an enquiry. I was a little disappointed to find that they don't share a list of local IFAs, they simply pick someone for you, who as it turns out isn't that local. Reading through the forums, unbiased appears to be a lead generation site which many IFAs don't subscribe to. We'd like to research local options. What resources would people recommend for finding and researching an adviser and their fee options?
2. My partner has an adviser for her personal pension but hasn't heard anything from them in nearly 15 months; no contact and no statement from them. Yet on her statement from the pension provider she has been charged 0.5% for adviser fees. We feel that it would be best to terminate that agreement and ask for the fees for the last year to be refunded. Does that sound reasonable?
3. What are people's thoughts on managing their own pension arrangements? The last letter (15 months ago) from partner's IFA was a few paragraphs that said she was happy with the risk profile and that no changes would be made. I have a DC pension where online I can see the performance of my portfolio and adjust the risk profile relatively easily...or so it seems. For a relatively simple portfolio is an IFA adding significant value? Can personal research compete with product expertise?
4. If you are paying an adviser a fee for advice are they truly independent, i.e. they cannot take commission for the products they suggest?

A general question, are fees for financial advice and reviews moving to a fixed fee? It's perfectly reasonable to expect a professional financial adviser to be rewarded for their advice and that fee should adequately reflect their time and the complexity of their client's portfolio. Should the rewards be a percentage of the fund or should paying an upfront fee and then a fixed yearly review fee, if you feel it's required, be the norm? 

tacpot12

I would offer the following answers to your questions:

1. Word of mouth is the best way that I know to find a good IFA, but you will need to speak to them to get an idea of the fees they might charge. 

2. Asking for fees that have already been charged doesn't sound that reasonable; your wife agreed to pay the fees for the service that they offered. If they have delivered the service, I don't think it fair to ask for the fees back. If she has a specific complaint, then fair enough. 

3. I manage my own pension arrangements. It is certainly nerve-wracking, given the effect that getting it wrong might cause, but it's simple enough once you have decided on your strategy. I pay 0.62% of my portfolio in fees to the Fund Managers, and 0.08% in fees to the Platform (AJ Bell), so 0.7% overall. 

4. Don't know the answer.  

Albermarle

chipfork said:

Apologies, I have a few questions which may have been covered before. I have had a session with Pension Wise and have been reading as much as I can.
For background, We've let our pension provisions trundle along with out too much thought or interaction, until now. We're in our early 50's and we both have a workplace DB scheme. We also have a number of DC schemes that we'd like to consolidate.

1. As unbiased.co.uk is listed on many of the government web sites I thought I would make an enquiry. I was a little disappointed to find that they don't share a list of local IFAs, they simply pick someone for you, who as it turns out isn't that local. Reading through the forums, unbiased appears to be a lead generation site which many IFAs don't subscribe to. We'd like to research local options. What resources would people recommend for finding and researching an adviser and their fee options?
2. My partner has an adviser for her personal pension but hasn't heard anything from them in nearly 15 months; no contact and no statement from them. Yet on her statement from the pension provider she has been charged 0.5% for adviser fees. We feel that it would be best to terminate that agreement and ask for the fees for the last year to be refunded. Does that sound reasonable? Does not sound like they are adding much so maybe time for a change .
3. What are people's thoughts on managing their own pension arrangements? The last letter (15 months ago) from partner's IFA was a few paragraphs that said she was happy with the risk profile and that no changes would be made. I have a DC pension where online I can see the performance of my portfolio and adjust the risk profile relatively easily...or so it seems. For a relatively simple portfolio is an IFA adding significant value? A point of some contention on this forum !Can personal research compete with product expertise? If you are prepared to do some reading and are reasonably numerate and able to be objective/calm in volatile markets , then managing  a simple portfolio is not difficult. It is is a bit more difficult when taking the pension than when you adding to it, as mistakes can not be so easily rectified when you are not earning .Having some DB pension reduces some of the risks. However you also have to be aware , how pensions work with tax relief, the different ways to take income from the pension in  a tax efficient way , possible Lifetime allowance and inheritance tax issues etc etc 
4. If you are paying an adviser a fee for advice are they truly independent, i.e. they cannot take commission for the products they suggest? As long as they are clearly an Independent FA then they get no commission . A tied FA can only offer their employers products .

A general question, are fees for financial advice and reviews moving to a fixed fee? It's perfectly reasonable to expect a professional financial adviser to be rewarded for their advice and that fee should adequately reflect their time and the complexity of their client's portfolio. Should the rewards be a percentage of the fund or should paying an upfront fee and then a fixed yearly review fee, if you feel it's required, be the norm? An initial one off fee followed by a % ongoing annual fee is the norm. Some will do a one off review only .

Most of the questions you ask have been chewed over several times in many different threads on this forum. You will get different opinions from different people on some of the topics . See a few starters for ten in bold above .

Marcon

chipfork said:

My partner has an adviser for her personal pension but hasn't heard anything from them in nearly 15 months; no contact and no statement from them. Yet on her statement from the pension provider she has been charged 0.5% for adviser fees. We feel that it would be best to terminate that agreement and ask for the fees for the last year to be refunded. Does that sound reasonable? 

It's the pension provider who sends statements, not the adviser, so if her personal pension is the only thing for which she has an adviser, it's hard to see why she'd get a statement. If she used an adviser for a portfolio (posh term for 'lots of different'!) then yes, you'd expect regular statements showing the various investments and current values/movements since the last statement.

Whether it's reasonable to ask for a refund of fees depends on what the fee covers. If it gives her access to the adviser and she's never chosen to contact them, that's down to her rather than the adviser. Check and see before complaining; it may simply be that it is a facility your wife has never needed or used.

dunstonh

A lot of advisers work by tax year basis and will be proactive in contact at least once during the tax year.  So, it possible to go outside of 12 months but as long as it equates to within the year, then its not an issue.

chipfork

Marcon said:

chipfork said:

My partner has an adviser for her personal pension but hasn't heard anything from them in nearly 15 months; no contact and no statement from them. Yet on her statement from the pension provider she has been charged 0.5% for adviser fees. We feel that it would be best to terminate that agreement and ask for the fees for the last year to be refunded. Does that sound reasonable? 

It's the pension provider who sends statements, not the adviser, so if her personal pension is the only thing for which she has an adviser, it's hard to see why she'd get a statement. If she used an adviser for a portfolio (posh term for 'lots of different'!) then yes, you'd expect regular statements showing the various investments and current values/movements since the last statement.

Whether it's reasonable to ask for a refund of fees depends on what the fee covers. If it gives her access to the adviser and she's never chosen to contact them, that's down to her rather than the adviser. Check and see before complaining; it may simply be that it is a facility your wife has never needed or used.

Looking through her documentation my partner has received a booklet from the IFA after a change to the plans, three in 14 years. She was having a yearly review, generally not face-to-face even before Covid, which lasted 10 mins at most. The last "review" over the phone was in Nov 2020, approximately 14 months ago which I'm told went along the lines of "Do you want to change anything on your pension such as the risk profile", answer "No I don't think so" and that was it. A letter followed confirming that nothing would be changed. Since then no communication from the adviser. Is that "advice"?

I will check the agreement, if the IFA isn't expected to be proactive and only responsive to enquiries then this approach doesn't really fit my partner's requirements and we'll wind it up and look for something better fitting to us. If a yearly review instigated by the IFA is part of the agreement then I would hope the IFA would understand that the 0.5% they received last year from the fund isn't warranted.

Dazed_and_C0nfused

The last "review" over the phone was in Nov 2020, approximately 14 months ago which I'm told went along the lines of "Do you want to change anything on your pension such as the risk profile", answer "No I don't think so" and that was it. A letter followed confirming that nothing would be changed. Since then no communication from the adviser. Is that "advice"?

Which, for the IFA cynics, could easily be down at the IFA's end as commenced review and client advised they didn't want to make any changes at this time.  Review ended.

Albermarle

Dazed_and_C0nfused said:

The last "review" over the phone was in Nov 2020, approximately 14 months ago which I'm told went along the lines of "Do you want to change anything on your pension such as the risk profile", answer "No I don't think so" and that was it. A letter followed confirming that nothing would be changed. Since then no communication from the adviser. Is that "advice"?

Which, for the IFA cynics, could easily be down at the IFA's end as commenced review and client advised they didn't want to make any changes at this time.  Review ended.

Even for the less cynical , it does seem like money for old rope !

dunstonh

I will check the agreement, if the IFA isn't expected to be proactive and only responsive to enquiries then this approach doesn't really fit my partner's requirements and we'll wind it up and look for something better fitting to us. If a yearly review instigated by the IFA is part of the agreement then I would hope the IFA would understand that the 0.5% they received last year from the fund isn't warranted.

If the pension was arranged after December 2013 then it must be proactive.   If it was before that date then it doesn't need to be.

Quite often you get a no change review.   Indeed, you can get that multiple years in a row. Then you may get a couple of change reviews in a row.   

chipfork

dunstonh said:

I will check the agreement, if the IFA isn't expected to be proactive and only responsive to enquiries then this approach doesn't really fit my partner's requirements and we'll wind it up and look for something better fitting to us. If a yearly review instigated by the IFA is part of the agreement then I would hope the IFA would understand that the 0.5% they received last year from the fund isn't warranted.

If the pension was arranged after December 2013 then it must be proactive.   If it was before that date then it doesn't need to be.

Quite often you get a no change review.   Indeed, you can get that multiple years in a row. Then you may get a couple of change reviews in a row.   

The pension funds were changed in 2018. The original pension and agreement was arranged in 2008. My partner has kept everything dating back beyond that date and I can find no agreement or contract stating the terms with the IFA.

We're notifying them that we wish to terminate the agreement. We will ask if the advice fees can be recompensed for the last year given there has been no contact or advice. Given we're unclear if the onus is on us to pin them down for advice then I'm not hopeful.

Just one other question, is it usual for separate Critical Illness cover to be sold at the same time as a pension? My partner has one that was taken out at the same time as the IFA became involved in 2008 and I have one that started at the same time as my workplace pension started.

dunstonh

The pension funds were changed in 2018. The original pension and agreement was arranged in 2008. My partner has kept everything dating back beyond that date and I can find no agreement or contract stating the terms with the IFA.

Arranged in 2008 would almost certainly be commission rather than fee.    You could get early fee arranged policies back then but it was early days not used by many.

We're notifying them that we wish to terminate the agreement. We will ask if the advice fees can be recompensed for the last year given there has been no contact or advice. Given we're unclear if the onus is on us to pin them down for advice then I'm not hopeful.

If it is a commission-based contract, then you have no grounds to either be supplied servicing or to ask for the commission to be returned.  Indeed, for many providers of that period, the commission was often not reflected in the charges on a like for like basis.   For example, instead of taking an initial commission, many advisers waived it to take renewal commission instead.    The charges to the consumer were the same either way.

If it is a fee based contract, and a service contract existed outlining the services being provided (unlikely for 2008 but possible) then a refund could be in order.

Just one other question, is it usual for separate Critical Illness cover to be sold at the same time as a pension? My partner has one that was taken out at the same time as the IFA became involved in 2008 and I have one that started at the same time as my workplace pension started.

Its not uncommon for multiple needs to be addressed during reviews.    The most common time for sales of that product tend to be with a mortgage or childbirth or not long after.  Or where someone was putting it off and needed a prompt.  Any discussion on financial needs can lead to solutions in those areas.