IFA to FA - options to fix the current mess and moving forward

Albermarle

Current fees are 0.4% service + 0.79% porfolio fee + 0.5% advice fee.

As already indicated, this is a bit on the high side.

0.5% advice fee is pretty standard for a larger portfolio. 0.4% service/platform fee could be shaved a bit. 0.79% for portfolio indicates the use of more expensive managed funds, as opposed to cheaper passive funds. 

I would say for a new IFA you should be targeting ; 0.5% for ongoing advice and a maximum other charges of 0.6% to 0.8% . As said the initial charge should be capped at < £5000.

DIY investing has been mentioned, which would be cheaper still but I get the impression from your posts and family situation this may not be the right route for you just now. 

ComicGeek

Albermarle said:

Current fees are 0.4% service + 0.79% porfolio fee + 0.5% advice fee.

As already indicated, this is a bit on the high side.

0.5% advice fee is pretty standard for a larger portfolio. 0.4% service/platform fee could be shaved a bit. 0.79% for portfolio indicates the use of more expensive managed funds, as opposed to cheaper passive funds. 

I would say for a new IFA you should be targeting ; 0.5% for ongoing advice and a maximum other charges of 0.6% to 0.8% . As said the initial charge should be capped at < £5000.

DIY investing has been mentioned, which would be cheaper still but I get the impression from your posts and family situation this may not be the right route for you just now. 

FA has now been removed this afternoon, that saves us 0.5%.

What I need is for an IFA to recommend the DIY pension for me, as I just don't have the time to read through all the options myself. I can physically set it up etc, and happy to pay reasonable rates for advice, but just blown away that the cheapest quote so far today has been £21k.

If I just opened a Fidelity pension (I have other investments with them which is why I picked them) at 0.2% annual service charge, and then used their Fidelity Multi Asset Allocator Growth Fund, is that going to be better than what I have at the moment? I can pay a Fidelity FA 1% rather than 3% to get advice - what real advantage is an IFA over a FA, are the various platforms/products really that different?

Kicking myself for getting into this situation, but don't want to jump into another mess. 

dunstonh

What I need is for an IFA to recommend the DIY pension for me, as I just don't have the time to read through all the options myself. I can physically set it up etc, and happy to pay reasonable rates for advice, but just blown away that the cheapest quote so far today has been £21k.

A 10th of that 21k is more suitable as a target.    If your area is like ours, you generally find that IFA firms that are better value, do not advertise and don't pay for listings on the likes of unbiased, vouchedfor etc.   If you are using a lead gen site for listings, then some of those sites take a large cut of the fee income and that pushes that initial cost up.    But there is no justification for 21k.  Indeed, goodness knows how that fits with the consumer duty starting shortly.

 I can pay a Fidelity FA 1% rather than 3% to get advice - what real advantage is an IFA over a FA, are the various platforms/products really that different?

Fidelity isn't bad value but its not the best value platform.  Fidelities in-house advisers only use Fidelity funds or the Fidelity DFM service.   Its better than paying £21k for sure but you can get better than that.

Linton

ComicGeek said:

Albermarle said:

Current fees are 0.4% service + 0.79% porfolio fee + 0.5% advice fee.

As already indicated, this is a bit on the high side.

0.5% advice fee is pretty standard for a larger portfolio. 0.4% service/platform fee could be shaved a bit. 0.79% for portfolio indicates the use of more expensive managed funds, as opposed to cheaper passive funds. 

I would say for a new IFA you should be targeting ; 0.5% for ongoing advice and a maximum other charges of 0.6% to 0.8% . As said the initial charge should be capped at < £5000.

DIY investing has been mentioned, which would be cheaper still but I get the impression from your posts and family situation this may not be the right route for you just now. 

FA has now been removed this afternoon, that saves us 0.5%.

What I need is for an IFA to recommend the DIY pension for me, as I just don't have the time to read through all the options myself. I can physically set it up etc, and happy to pay reasonable rates for advice, but just blown away that the cheapest quote so far today has been £21k.

If I just opened a Fidelity pension (I have other investments with them which is why I picked them) at 0.2% annual service charge, and then used their Fidelity Multi Asset Allocator Growth Fund, is that going to be better than what I have at the moment? I can pay a Fidelity FA 1% rather than 3% to get advice - what real advantage is an IFA over a FA, are the various platforms/products really that different?

Kicking myself for getting into this situation, but don't want to jump into another mess. 

Are the IFAs you are considering national firms with glossy brochures and smart offices or simple local High Street one-person businesses?  You should find the latter significantly cheaper and perfectly adequate for your needs. 

Albermarle

ComicGeek said:

Albermarle said:

Current fees are 0.4% service + 0.79% porfolio fee + 0.5% advice fee.

As already indicated, this is a bit on the high side.

0.5% advice fee is pretty standard for a larger portfolio. 0.4% service/platform fee could be shaved a bit. 0.79% for portfolio indicates the use of more expensive managed funds, as opposed to cheaper passive funds. 

I would say for a new IFA you should be targeting ; 0.5% for ongoing advice and a maximum other charges of 0.6% to 0.8% . As said the initial charge should be capped at < £5000.

DIY investing has been mentioned, which would be cheaper still but I get the impression from your posts and family situation this may not be the right route for you just now. 

FA has now been removed this afternoon, that saves us 0.5%.

What I need is for an IFA to recommend the DIY pension for me, as I just don't have the time to read through all the options myself. I can physically set it up etc, and happy to pay reasonable rates for advice, but just blown away that the cheapest quote so far today has been £21k.

If I just opened a Fidelity pension (I have other investments with them which is why I picked them) at 0.2% annual service charge, and then used their Fidelity Multi Asset Allocator Growth Fund, is that going to be better than what I have at the moment? I can pay a Fidelity FA 1% rather than 3% to get advice - what real advantage is an IFA over a FA, are the various platforms/products really that different?

Kicking myself for getting into this situation, but don't want to jump into another mess. 

Fidelity is one of the regular options for a DIY Investor. 
The fund you have chosen is known as a medium risk low cost multi asset fund. I think it also has around a 0.2% charge, so you will be paying 0.4% in total. The Fidelity advice service can only recommend a portfolio of Fidelity funds I think. I would watch out for them recommending more expensive actively managed funds than the low cost passive one you have picked.
IFA vs FA .
Remember that financial advice is not just about selecting an investment portfolio. They should also be offering advice on taxes ( relating to pensions, investments, inheritance tax etc)and other family finance issues. Your advisor was probably a bad example....