My IFA is moving to True Potential Wealth Management

TadleyBaggie · 2 October 2022 at 10:12PM

The IFA I have been using for 12 years or so, and have been very happy with, is nearing retirement and has announced he is moving to True Potential Wealth Management to allow a smooth transition for his clients. His plan is for all the clients to move over and when everyone is settled to retire. Currently my drawdown pension and 2 S&S ISAs are with Fidelity and I have been happy with the platform. I currently pay the IFA 0.5% pa of the investments (roughly £300K invested).

I've yet to have a face to face with him to get more details but he claims the ongoing fee will also be 0.5%.

I've checked out the TPWM threads on MSE and it all seems a bit neutral, no real horror stories but nothing massively positive either. I guess my three options are:

Move to TPWM
Stay with Fidelity and find another IFA
Stay with Fidelity and self invest

Option 3) is my least favoured, as I have little knowledge of investments and no real desire to start now.

I know finding a good IFA is problematic, I stuck lucky with my current one. So the easiest option is to move to TPWM.

I'd appreciate any comments on if moving is a good or bad idea.

dunstonh · 2 October 2022 at 11:03PM

TP pay the IFA 8% of the funds under management for each client he moves to TP.

https://citywire.com/new-model-adviser/news/true-potential-offers-8-aum-cash-deal-to-retiring-advisers/a1376828

So, your IFA has chosen to sell you to the highest bidder that is in his interests rather than arrange for another IFA firm to buy him out. All of the tied/restricted salesforce models pay more than IFAs for buying out firms. Vertically integrated firms (those that control distribution, product/platform and investments all in house) can get away with deals that look an awful lot like commission. IFAs cannot.

Whenever an IFA recommends a switch of provider/platform and investments, it has to be in the interests of the client. With a restricted advice service, it does not. It is limited to offering the best option in its own product range. Generically, you would expect the costs of your portfolio to rise when moving from an IFA to an FA.

wjr4 · 3 October 2022 at 1:16PM

Find a new IFA

Beddie · 4 October 2022 at 10:49PM

I'd wait and see. Move over to them and you'll probably notice no tangible differences. After a while, if their service slips below what you expect, look elsewhere.