ONGOING FINANCIAL ADVICE FEE

abiik89

Hi folks,
 I've transferred my pension over £600K into drawdown a couple of years ago, other than planning to take £50,000 from the pot, I don't plan on using it for income for another 7 or 8 years. My fund sits in Prudential fund series E, which doesn't appear to be the worst or best, smoothing kind of muddies the waters a bit.
 When I transferred I signed up for ongoing advice at 0.75 per annum. With no contact for a year or need for an IFA, this seems like a waste of funds.
Can I easily just cancel this ongoing advice fee, and when ready just ask Prudential for a lump sum?  
Many thanks for your thoughts and feedback.

dunstonh

When I transferred I signed up for ongoing advice at 0.75 per annum. With no contact for a year or need for an IFA, this seems like a waste of funds.

Its all about your perception.    For example, most of our reviews you have tax allowance use, CGT calculations, bed & ISA, bed & pension, portfolio rebalancing etc.       However, some people have far fewer needs and often just have the adviser to act as a sounding board and to run things past and explain the goings on with their investments.

In your case, you have been put in a more expensive option where the IFA passes a lot of the investment responsibility to the provider (as it's a provider-owned brand fund), and you pay for that. It's a lazy, niche option aimed at investors who don't understand investing and don't want to.   So, if there are no other things that the adviser is doing and you don't think there is value in it, then you should end the ongoing servicing.

Can I easily just cancel this ongoing advice fee, and when ready just ask Prudential for a lump sum?  

You can with both. However, you will need to tell Pru which method.  They wont tell you the optimal methods.  That is for you or your adviser to work out. 

I don't plan on using it for income for another 7 or 8 years. 

Is that because you have other income or other financial means to support you?     If there is no other income but you are living of other savings/investments then you do have other transactions that you should be carrying out from the pension.

abiik89

dunstonh said:

When I transferred I signed up for ongoing advice at 0.75 per annum. With no contact for a year or need for an IFA, this seems like a waste of funds.

Its all about your perception.    For example, most of our reviews you have tax allowance use, CGT calculations, bed & ISA, bed & pension, portfolio rebalancing etc.       However, some people have far fewer needs and often just have the adviser to act as a sounding board and to run things past and explain the goings on with their investments.

In your case, you have been put in a more expensive option where the IFA passes a lot of the investment responsibility to the provider (as it's a provider-owned brand fund), and you pay for that. It's a lazy, nice option aimed at investors who don't understand investing and don't want to.   So, if there are no other things that the adviser is doing and you don't think there is value in it, then you should end the ongoing servicing.

Can I easily just cancel this ongoing advice fee, and when ready just ask Prudential for a lump sum?  

You can with both. However, you will need to tell Pru which method.  They wont tell you the optimal methods.  That is for you or your adviser to work out. 

I don't plan on using it for income for another 7 or 8 years. 

Is that because you have other income or other financial means to support you?     If there is no other income but you are living of other savings/investments then you do have other transactions that you should be carrying out from the pension.

Thanks for the reply, it’s helped with my thoughts going forward. I have other pension and shares I will use as income for the next few years.

Bostonerimus1

Is there a list of things to be done each year and services that you can use? If not what are you paying for? It seems to me that "ongoing financial services" are often similar to car undercoats or extended warrantees.

abiik89

Nothing to be done, other than they contact you once a year and expect too sign up for another year at 0.75%

wjr4

abiik89 said:

Nothing to be done, other than they contact you once a year and expect too sign up for another year at 0.75%

That’s just a lazy financial adviser, not all are like that I promise! Do they not offer a cashflow model for your financial plan?

abiik89

wjr4 said:

abiik89 said:

Nothing to be done, other than they contact you once a year and expect too sign up for another year at 0.75%

That’s just a lazy financial adviser, not all are like that I promise! Do they not offer a cashflow model for your financial plan?

They go over the fund performance for the last year. Which I can calculate myself. Print out a couple of graphs to try and impress you, all available from the Pru. Then sign here please. 

dunstonh

abiik89 said:

wjr4 said:

abiik89 said:

Nothing to be done, other than they contact you once a year and expect too sign up for another year at 0.75%

That’s just a lazy financial adviser, not all are like that I promise! Do they not offer a cashflow model for your financial plan?

They go over the fund performance for the last year. Which I can calculate myself. Print out a couple of graphs to try and impress you, all available from the Pru. Then sign here please. 

As has been said, you are in a lazy option with a lazy adviser.