IFA for pension advice

Beddie

You sound like you'll never be happy with an IFA, as you have your own ideas about how things should be done. So, stick with that, unless you're willing to let go of the control and management of your pensions etc.

chrispies2020

Beddie -

I suppose its a question of trust. What I would prefer is to have something solid on which to make a decision.

I don't seem to be able to find this, which is why I posted. If I could generally discover whether IFA's have done a good job for other people, then it would be much easier for me to go down the route of signing up to financial management of this kind. But so far the whole area seems entirely speculative. As I said previously - its completely opaque to me with many options but no idication which to take.

I am not alone in thinking this. Everyone I speak to is in the same boat. Trying to make the best decisions, but completely unsure if they are doing so.

 

Albermarle

The  charges I have been quoted are higher than mentioned here. Initial fee up to 100k is 3% and the ongoing charge is 0.7%. Is this excessive?

0.7% ongoing is normal for a pot size in the region of £200K/£400K . If you have more then 0.5% would be better.

3% initial charge up to £100K is also normal, presuming the % would reduce if the pot was much bigger.

As I say, the whole area of my personal finances is entirely opaque to me. It is exaclty the same for the majority of people I speak to

Yes the level of personal finance knowledge in the population is very low and many people make big mistakes, wrong assumptions or just do nothing and hope for the best.

However it is not rocket science and a reasonably basic knowledge can be built up using Google, You Tube and reading these forums of course. Most people though find it boring and can't be bothered, so press on in blissful ignorance.

Linton

An IFA should guide you through all your "dont knows" to come up with a documented understanding of what you want to achieve and a recommended way of using your pot to provide for that together with a justification for the choice.  That sounds rather like the "solid base" you are looking for.

In my particular case many years ago, relatively early in my career, an IFA changed my life.  That was simply by asking one question - when did I want to retire.  A question that I had never considered before.  In the event I was able to do so within a year of the off-the cuff answer I gave, it had turned into an objective rather than a guess. How do you value that?

You still have not told us the size of your pot.  Is it money that really matters for your future well-being?  If it is much less than £100K then taking advice may not be worthwhile for you or the advisor.  If it is much more than given all your dont knows I feel it could be very costly not to.

A quick bit on annuities - you do not necessarily lose all your money when you die.  You could go for a joint life annuity where the survivor gets for example 50% of the income or you could specify a lump sum to be left at the end.  There are a wide range of options with an annuity which an IFA would explain.

chrispies2020

Including basic savings - and after recent stock market turnbulance - my pension fund stands at around 180k (it was more before last year). For many years my main aim was clearing our mortgage and I'm very glad I decided to do so - thats what I ploughed a large part of my earnings into. For peace of mind.

When would I like to retire? 3 or 4 years time.

Based on what yoiu say, the fees seem high for my more limited savings.

You have mentioned links to good places of advice on the internet, including on Youtube. Could you post these links here?

Albermarle

chrispies2020 said:

Including basic savings - and after recent stock market turnbulance - my pension fund stands at around 180k (it was more before last year). For many years my main aim was clearing our mortgage and I'm very glad I decided to do so - thats what I ploughed a large part of my earnings into. For peace of mind.

When would I like to retire? 3 or 4 years time.

Based on what yoiu say, the fees seem high for my more limited savings.

You have mentioned links to good places of advice on the internet, including on Youtube. Could you post these links here?

Giving personal financial advice is a highly regulated activity and all your personal details, objectives etc have to be taken into account .An IFA can be sued for offering bad advice. So you only get 'advice' if you pay for it.
Everything else, such as on this forum, google and youtube is just general guidance, pointers in the right direction, with a sprinkling of nonsense sometimes as well !
MeaningfulMoney - YouTube

chrispies2020

 Albermarle

Yes, I am aware of the nonsense :-)

xylophone

Is your wife in line for a full NSP?

Does she have pensions over and above the state pension and her own savings?

Nebulous2

To start with Linton's first question:- 

What are you spending now? Many people on here have detailed spreadsheets of all their expenditure going back years and detailed budgets going forward. I'm more a back of a cigarette packet type budgeter for outgoings, but I know what I've been worth on the first of each month for a long-time, and know that my income has exceeded expenditure for most of that time. I've also spent a fair bit of time screwing down expenditure, getting new quotes for insurance, renegotiating mobile costs etc. 

There's an interesting thread on the pension forum called, what is your number, which highlights that we are all different in our retirement plans, with different expectations about our future. The over 50s money saving forum also has an interesting thread on how much to live on, which is worth reading. 

We've seen people who reckon they can live on £8k per annum in retirement, and others looking for close to £100k. Those are outliers though, with most probably between £20k and £50k. 

Once you have worked out what you need, the next step is how you are going to achieve it. If you are sure that your income exceeds your requirements, then the only question left is:- "What's stopping you?" 

chrispies2020

 Nebulous2

That sounds extremely useful. I can certainly see how I might be able to employ these threads to usefully understand where I stand. I suppose - being already  in my 60's - I also realise there are limited options for me to change what I can 'achieve'.

Certainly its been an interesting discussion for me. If nothing else it makes me realise how few and how uncertain the choices are for so many of us in retirement.


Thanks