Is it time to change from a wealth Manager aka True Potential to IFA or go DIY?

dunstonh

Albermarle said:

Have you tried a small local IFA rather than a national company?    They may be much cheaper yet perfectly adequate for your needs. 

AIUI, the OP is looking at moving away from TP and has spoken to Reeves, which from their website are a smaller organisation based around the Gatwick region. 

I have had an initial conversation with Reeves to see what they could offer and they are putting together a proposal. It looks like it would be £10K switch over then 1.1% ongoing

£10K seems a lot, even for pots in excess of £400K.

If 1.1% covers IFA + platform + investment costs, then that is pretty good. Obviously you need to check the proposal carefully though.

ongoing seems fine but the initial amount is obscene.  Many IFA firms now have charging models with a cap and collar or tiering to avoid going over a decency cap.   You typically see figures closer to £2.5k-3.5k now.   £10k initial for mainstream wrappers/investing is damned expensive.

Bobajobbob

Any IFA looking for a yearly ongoing management fee that also charges anything more than a nominal initial setup/transfer fee should be given a very wide birth in my view. How can they possibly justify charging £10k or a significant percentage of the entire portfolio value when they also are looking to extract a regular percentage on an ongoing basis?  You could argue a higher initial fee can be justified for one off advice but again anything other than a reasonable fee based on the hours required to complete the work simply demonstrates a profligacy and propensity to overcharge on all aspects of the service.

Albermarle

Bobajobbob said:

Any IFA looking for a yearly ongoing management fee that also charges anything more than a nominal initial setup/transfer fee should be given a very wide birth in my view. How can they possibly justify charging £10k or a significant percentage of the entire portfolio value when they also are looking to extract a regular percentage on an ongoing basis?  You could argue a higher initial fee can be justified for one off advice but again anything other than a reasonable fee based on the hours required to complete the work simply demonstrates a profligacy and propensity to overcharge on all aspects of the service.

An issue is that you could agree to a lower initial charge and then drop out of the ongoing charge, which I think is normally actually charged monthly.
AFAIK, you will not normally be contracted to stay with the ongoing charge for a fixed period, apart from notorious exceptions like St James Place.

TallGirl

Thank you all for your comments yes it is the Reeves Linton found and I agree £10K is really obscene especially as it is 1 ISA and 1 SIPP so not a lot of work moving things around from various providers. 

Interesting conversation re the initial fee and the ongoing fee. I know I paid an initial fee (I think it was £3K or £4K) when I first went with an adviser but he helped me after a bereavement getting payouts from two providers incl a life insurance so it was good to have that advise as it was a large sum back then to invest from scratch so to speak. Now it is a lot simpler just those two products and I would be happy to leave the SIPP where it is.

It is quite ironic as I have worked 20 years in the charity advice sector but obviously not regulated  financial advice. I am kind of thinking about it like do I need ongoing advice or can I manage myself that is the key question. I am still a strong believer in passive investments over actively managed - probably also a dislike towards the stereotypical banker/stockbroker type. I do have a plan for where I want to get to before I retire and how much money I need so that is sorted. I understand about drawdown and how pensions works so do not need advice on that. I think the bit I would need to research more when the time comes is making sure I draw my retirement income as tax efficiently as possible. 

We shall see what the adviser has to say on Thursday (app has been moved). I suspect he is still getting the fee for the RL pension not True Potential which is fine just think he should have said when he moved the ISA over to TP.

katejo

Albermarle said:

Bobajobbob said:

Any IFA looking for a yearly ongoing management fee that also charges anything more than a nominal initial setup/transfer fee should be given a very wide birth in my view. How can they possibly justify charging £10k or a significant percentage of the entire portfolio value when they also are looking to extract a regular percentage on an ongoing basis?  You could argue a higher initial fee can be justified for one off advice but again anything other than a reasonable fee based on the hours required to complete the work simply demonstrates a profligacy and propensity to overcharge on all aspects of the service.

An issue is that you could agree to a lower initial charge and then drop out of the ongoing charge, which I think is normally actually charged monthly.
AFAIK, you will not normally be contracted to stay with the ongoing charge for a fixed period, apart from notorious exceptions like St James Place.

You mention the 'notorious' St James Place again here. Do you have as low an opinion of Cooper Associates Wealth Management? I am just interested because I never contacted St James Place myself but was encouraged to use them by Cooper Associates Wealth Management. If SJP has such a bad reputation, why do other Wealth Management Companies use them? I'd like to know before I contact my adviser and challenge him  over these issues.

IanManc

katejo said:

Albermarle said:

Bobajobbob said:

Any IFA looking for a yearly ongoing management fee that also charges anything more than a nominal initial setup/transfer fee should be given a very wide birth in my view. How can they possibly justify charging £10k or a significant percentage of the entire portfolio value when they also are looking to extract a regular percentage on an ongoing basis?  You could argue a higher initial fee can be justified for one off advice but again anything other than a reasonable fee based on the hours required to complete the work simply demonstrates a profligacy and propensity to overcharge on all aspects of the service.

An issue is that you could agree to a lower initial charge and then drop out of the ongoing charge, which I think is normally actually charged monthly.
AFAIK, you will not normally be contracted to stay with the ongoing charge for a fixed period, apart from notorious exceptions like St James Place.

You mention the 'notorious' St James Place again here. Do you have as low an opinion of Cooper Associates Wealth Management? I am just interested because I never contacted St James Place myself but was encouraged to use them by Cooper Associates Wealth Management. If SJP has such a bad reputation, why do other Wealth Management Companies use them? I'd like to know before I contact my adviser and challenge him  over these issues.

Well they would do that, wouldn't they?

"Cooper Associates Wealth Management is a Principal Partner Practice of St. James’s Place Wealth Management."

https://thecooperway.com/wealth-management/

dunstonh

katejo said:

Albermarle said:

Bobajobbob said:

Any IFA looking for a yearly ongoing management fee that also charges anything more than a nominal initial setup/transfer fee should be given a very wide birth in my view. How can they possibly justify charging £10k or a significant percentage of the entire portfolio value when they also are looking to extract a regular percentage on an ongoing basis?  You could argue a higher initial fee can be justified for one off advice but again anything other than a reasonable fee based on the hours required to complete the work simply demonstrates a profligacy and propensity to overcharge on all aspects of the service.

An issue is that you could agree to a lower initial charge and then drop out of the ongoing charge, which I think is normally actually charged monthly.
AFAIK, you will not normally be contracted to stay with the ongoing charge for a fixed period, apart from notorious exceptions like St James Place.

You mention the 'notorious' St James Place again here. Do you have as low an opinion of Cooper Associates Wealth Management? I am just interested because I never contacted St James Place myself but was encouraged to use them by Cooper Associates Wealth Management. 

It is a mandatory regularoty requirement that an adviser should tell you whether they are IFAs or restricted.  This usually happens in the initial meeting or phone call.  Cooper Associates Wealth Management should have told you that they are sales reps of SJP.

So, in effect, by contacting them, you were dealing with one of SJP's sales reps.

If SJP has such a bad reputation, why do other Wealth Management Companies use them? I'd like to know before I contact my adviser and challenge him  over these issues.

Firms make the choice to be independent or restricted.  In general, the more you restrict as an adviser firm, the bigger the cut of the fees (or reduced costs) you get.    That firm decided not to be independent but to join SJP.  In doing so, they have no choice but to offer the products and funds of SJP and no-one else.

If you go McDonalds franchise, what food would you expect them to offer?  
And because the restaurant owner has chosen to open a Mcdonalds, does that make them the best restaurant?  

ianthy

Some years ago I faced a similar situation with TP, they were managing 50% of my portfolio, the balance was managed by myself. I felt the funds were overly complex and mirrored what I could set up. Performance was no better … if I factored in fees etc it was 2-3% worse. 

I moved 100% to self manage….. this is not a route for everyone. I only took the decision once I had the time to really focus and understand my investments. I would still be happy to pay for one off advice. 

TallGirl

ianthy said:

Some years ago I faced a similar situation with TP, they were managing 50% of my portfolio, the balance was managed by myself. I felt the funds were overly complex and mirrored what I could set up. Performance was no better … if I factored in fees etc it was 2-3% worse. 

I moved 100% to self manage….. this is not a route for everyone. I only took the decision once I had the time to really focus and understand my investments. I would still be happy to pay for one off advice. 

Thank you everyone and alos @ianthy thanks for sharing your experiences. I am certain I can go DIY and then just pay for one off advice as you say. After Thursday I might have a clearer picture.

solidpro

TallGirl said:

I have had pension forecasts done and it looks about doable to have £30K p.a as I also have savings (Premium Bonds to live off to start with).

How did you work that out?