Should I engage a Financial Advisor?

Linton

VNX said:

Sorry to drag up an old thread I’m in the OP boat wondering if it’s right to pay for advice on my pensions and savings etc

ive just had a online chat with someone from M&G and I’m struggling to find truly independent advisors. 

I just worry if I go ahead I’ll be paying fees for something I could do myself, sorry to sound wet behind d the ears it’s first time I’ve looked into paying for financial advise 

Finding a fund is easy.  The more difficult problems are to choose a set of funds that are appropriate to your particular circumstances and objectives together with covering wider aspects such as retirement financial strategy and planning, optimising tax, dealing with inheritance requirements etc etc. 

There will probably be an IFA in your local high street.  Perhaps Google "IFA" with your local town or county. Or talk to friends.relations/neighbours. Make sure they are really IFAs, if they are they will say so.  Fix up free half hour appointments with perhaps 3 IFAs you find for you to say what you want and them to say what  they can do for you and what the charges will be.  You can then decide who you would be most happy working with.

Avoid the big national companies as they are likely to be expensive.  A small local business should be more than adequate.  If your pot size is less than £50K-£100K an IFA may not be interested in taking the job since the cost of the fact find and meeting regulatory requirements could well make it uneconomical.

dunstonh

ive just had a online chat with someone from M&G and I’m struggling to find truly independent advisors. 

Clearly you are not going to find an independent if you are are approaching providers.

The vast majority of IFAs are small local firms of 1-5 advisers.   They will have little to no internet coverage in the same way your local deli, butcher or fishmonger have little or none either.

I just worry if I go ahead I’ll be paying fees for something I could do myself, sorry to sound wet behind d the ears it’s first time I’ve looked into paying for financial advise 

You can do everything an IFA does yourself.  In the same way you can repair your own boiler or service your car or build an extension. 

Eyeful

1. Do you understand the difference between an Independent Financial Advisor (IFA) & a FA?
2. This may be of interest to you: 
https://www.which.co.uk/money/investing/financial-advice/how-to-find-a-financial-adviser-afZ375F6BIiC
3. As Linton has pointed out:
 If your pot size is less than £50K-£100K an IFA may not be interested in taking the job.
4. You could try asking if there are any IFA's in your town either on
(a) Google
(b) "Perplexity". (which is a chat bot).
5. On YouTube have a look at (a) James Shack (b) Meaningful Money.
In to their search box, type "Pensions". You may find some interesting and useful things on pensions.

soulsaver

I used 'Bark' a few years ago to find an IFA for a final salary pension transfer.

I had replies from 4 or 5 fairly local IFAs and a good service from the one I went with.

Bark.com: A Revolutionary Way to Hire Local Services & Professionals

VNX

Thank you all for your help, very much appreciated 

Redlander

Hi, I'm the OP. You might be interested to know what I did.
I decided to do without an advisor. For my platform I chose Interactive Investor, which charges a fixed monthly fee instead of a percentage of your pot. Then I put all my savings into a very well known tracker fund - Vanguard Life Strategy 60.
I reasoned that although some advisors and some managed funds might do better than this, some will also do worse and it's impossible to predict in advance which they will be. Furthermore any bonus would likely be swallowed up by the advisor's and manager's fees.

eskbanker

Redlander said:

Then I put all my savings into a very well known tracker fund - Vanguard Life Strategy 60.

At the risk of splitting hairs, Vanguard's LifeStrategy range aren't tracker funds!

They're multi-asset products, comprising a collection of underlying passive investments, many of which are trackers, but the products themselves don't track any index as such....

IanManc

eskbanker said:

Redlander said:

Then I put all my savings into a very well known tracker fund - Vanguard Life Strategy 60.

At the risk of splitting hairs, Vanguard's LifeStrategy range aren't tracker funds!

They're multi-asset products, comprising a collection of underlying passive investments, many of which are trackers, but the products themselves don't track any index as such....

Eskie's right. Vanguard Lifestrategy is a tied managed multi-asset fund of funds. The makeup involves management decisions such as having 14.6% out of the 60% equity portion (i.e nearly a quarter) of the fund invested in UK equities, which you would never find in a market capital weighted index - for example, the FTSE Global All-Cap Equity Index has a 3.4% allocation to the UK.

If you were intending to invest in a tracker you certainly haven't met your objective by choosing VLS60.

Albermarle

Redlander said:

Hi, I'm the OP. You might be interested to know what I did.
I decided to do without an advisor. For my platform I chose Interactive Investor, which charges a fixed monthly fee instead of a percentage of your pot. Then I put all my savings into a very well known tracker fund - Vanguard Life Strategy 60.
I reasoned that although some advisors and some managed funds might do better than this, some will also do worse and it's impossible to predict in advance which they will be. Furthermore any bonus would likely be swallowed up by the advisor's and manager's fees.

It is probably worth noting that having an advisor is probably less important when you are growing the pension, and still have some years to retirement. Mistakes or bad luck are less of an issue when you are still earning.
If you are coming up to retirement, or already retired and you will be reliant on the pension, then it might be time to think again.
Of course you can still DIY in retirement but the stakes are a bit higher, especially if you are really reliant on this particular pension to fund your retirement.
There have been some sad stories on here in recent times, where pension funds have dropped markedly just before retirement, due to the crash in bond/gilt values in 2022, as the posters where not really clued up in what they were invested in. 

eskbanker

Albermarle said:

It is probably worth noting that having an advisor is probably less important when you are growing the pension, and still have some years to retirement. Mistakes or bad luck are less of an issue when you are still earning.

Not sure I'd agree with that - mistakes made early in life could also have substantial impact on retirement plans!

OP plumped for a 60/40 multi-asset fund and this would probably be unnecessarily cautious for someone under, say, 40 who's accumulating for retirement, in that it would in all likelihood deliver a significantly smaller pot than being 100% in equities....