Are these IFA Fees reasonable

Tony_J

BTW - meant to double check - is your IFA definitely independent?  Were they recommended?

Yes they are IFA.  I was used by a work colleague who was pleased with them.  Interesting to see AVIVA in your funds.  This is who my smaller dormant pension is with, which I was considering moving.  Perhaps I could keep this where it is and add to it (I'd already asked. Unfortunately I cannot add to the AEGON fund)

dunstonh

  I don't see any benefit to me moving my largest fund when I indicated I was satisfied with it.  

Have you compared it with similar risk investments?   i.e. you are satisfied with it, but is that based on comparisons with similar alternatives?    Plenty of times, I have had people say they are happy with something only to find out that they are off the pace with similar risk alternatives.   

If the adviser cannot show you the benefit, then it probably means there is little or no benefit.   

A relative had their company bring “Wealth at Work” in for ‘free’ pension consultations.  
The resulting report she got was very lengthy, but the small part near the back actually showed her funds, with THEIR PREDICTIONS, doing better if they were left with Aviva rather than moving to the WoW fund 🤣
Laughable!
The implication was that they were Independant (they are not!).  

This is where being an IFA differs from an FA.  IFAs have to show that justification.    FAs can just mop up into their in-house or tied to options with lesser justification.

Yes they are IFA.  I was used by a work colleague who was pleased with them.  Interesting to see AVIVA in your funds.  This is who my smaller dormant pension is with, which I was considering moving.  Perhaps I could keep this where it is and add to it (I'd already asked. Unfortunately I cannot add to the AEGON fund)Aviva have thousands of versions of pensions.   I have a case I am doing at the moment, where they have 3 Aviva pensions but they are all different.  One of which is a hybrid replacement plan (now a S32 buy out bond) that only people employed by that company would have.   

Albermarle

Tony_J said:

cfw1994 It sounds to me like you might have a fair grip on things: is that how you feel?

Thanks for your encouragement.  It is selecting the funds that I feel inadequate about.  I'm now thinking about starting a pension with vanguard in a managed fund.  I could transfer the small fund into it and add the extra I cannot put in my workplace fund.

So as I'm losing confidence with the IFA, I'm not sure if I should follow their advice on switching my current workplace scheme funds.  This is with Scottish widow.  They recommended moving to 50% “pension portfolio A” and 50% “pension portfolio three”.  I guess I could move these myself.  I am thinking about moving 40% into each fund, then I could have a comparison to see if it does better

The problem always is what is exactly meant by better.

Lets say you have Fund A, which is 100% equity, and Fund B which is a classic 60:40 equity: bonds split.

Then over the next 5 years we have a boom time in stock markets. In which case Fund A will grow more.

On the other hand if the next 5 years are a bit rocky and include a big global stock market crash, then Fund B will drop less. 

So which is 'better' will entirely depend on market conditions.

In the longer term, you would normally expect Fund A to grow more. However many people would not be able to tolerate the volatility, so for them Fund B would still be better. 

barnstar2077

Would you like to earn £5k, plus an ongoing fee?  If you do some homework you can DIY.

If you don't fancy transferring your pensions to a SIPP and picking a fund or two, why not ring Aegon again and get a bit more clarification on what they could do for you and how much it would cost?

Either way have a look at some passive funds instead of active.  A couple of friends I have spoken to about their investments both went with the FA's suggestion and ended up with a real hodge podge of ten or so active funds, all costing too much while also being less predictable long term.  I guess they want to make it look like they hold the secret sauce and you will never cope without them! 

Tony_J

BTW - meant to double check - is your IFA definitely independent?  Were they recommended?

Definately an IFA (I assume the I is for independant).  Was used by a work colleague who reported being happy.

Tony_J

cfw1994 said:

BTW - meant to double check - is your IFA definitely independent?  Were they recommended?

Yes definately independant, sort of recommended.  My manager used them and seems quite happy, but I don't think he has any pensions other than his current workplace.

and it does seem the drawdown element is the main justification.  Looking at the graphs in the report I think it predicts a lower growth if I were to move to their suggestion.  The only justification I think they could make is I did indicate wanting quite a low risk, but to pay a significant sum plus 1% management fee for a fund with worse projected growth seems a ludicrous suggestion

cfw1994

Tony_J said:

cfw1994 said:

BTW - meant to double check - is your IFA definitely independent?  Were they recommended?

Yes definately independant, sort of recommended.  My manager used them and seems quite happy, but I don't think he has any pensions other than his current workplace.

and it does seem the drawdown element is the main justification.  Looking at the graphs in the report I think it predicts a lower growth if I were to move to their suggestion.  The only justification I think they could make is I did indicate wanting quite a low risk, but to pay a significant sum plus 1% management fee for a fund with worse projected growth seems a ludicrous suggestion

Well....a ludicrous suggestion is not so ludicrous if that is what YOU asked for 😉


I'm not good at multi-quoting, but Dunstonh suggested (to my earlier reply) that "This is where being an IFA differs from an FA.  IFAs have to show that justification.    FAs can just mop up into their in-house or tied to options with lesser justification."
W@W had given my relative their 'justification', but it showed their wealth growing slower than if it was left alone 🤦‍♂️  Just weird, and I guess they hoped by hiding it at the end of a huge report, it would get ignored and just signed over!


Tony, you sound to me like you kind of feel you could do it better yourself, and don't fancy giving a sum to an IFA to do a job you aren't impressed with?

I cannot give you advice, but that is precisely what many here do - DIY 👀

In many ways NOBODY will ever know if they would have been better with an IFA over DIY - we can all hear dire warnings about how you can go badly wrong - but if you have a good handle on what your personal goals are, and you can pick funds to suit those needs, with a decent cash backdrop to withstand any "bumps in the investment road", then why not go for it 🤷‍♂️

Good luck 👍

dunstonh

The only justification I think they could make is I did indicate wanting quite a low risk, but to pay a significant sum plus 1% management fee for a fund with worse projected growth seems a ludicrous suggestion

Over the long term, the higher the risk (in the conventional scale) the better the returns.  So, by default, wherever you take lower risk, the projections will be for lower returns.

However, in short-term periods, the higher the risk, the higher the losses.

So, you asked for lower risk, the IFA wrote the report based on that, and now you are calling it ludicrous.  

Tony_J

dunstonh said:So, you asked for lower risk, the IFA wrote the report based on that, and now you are calling it ludicrous.  

Perhaps I wasn't clear.  I indicated a low risk, not LOWER risk and this was in response to their questions on risk.

I'm pretty sure the funds are already low risk.  IF the IFA was following what I'd "asked for" that should have taken in to account that I'd specifically said I was happy with my largest DC pension where it is.  So to recommend moving it surely they should have provided the reason for me to change my preference.  In so far as they did it was simply because drawdown is not an option for the fund it is in.  But as I have since found out that is not really an issue.  Therefore I can only conclude their motivation was to get the business rather than my interests.

Tony_J

cfw1994 said:

Tony, you sound to me like you kind of feel you could do it better yourself, and don't fancy giving a sum to an IFA to do a job you aren't impressed with?

I cannot give you advice, but that is precisely what many here do - DIY 👀

In many ways NOBODY will ever know if they would have been better with an IFA over DIY - we can all hear dire warnings about how you can go badly wrong - but if you have a good handle on what your personal goals are, and you can pick funds to suit those needs, with a decent cash backdrop to withstand any "bumps in the investment road", then why not go for it 🤷‍♂️

Good luck 👍

From the advice I've been given here I do feel better about doing it myself and the main realisation is that the funds themselves are already diversified.  I had sort of assumed it would be like buying individual company shares.  I wont be moving significant sums from where they currently are.  I'm looking forward to the journey

Thanks for the encouragement.