How can I decide?

sandsy

When an adviser gives advice, they have to take your investment objectives into account. Did you tell them that one of your key objectives was to invest in (low cost) passive funds?

dunstonh

Yes completely independent.
They are big enough to whether someone not following through on their report with them I guess!!
I feel pretty railroaded by their calls at times and told them to stop

You make it sound like they are not an "independent" IFA but a chain IFA.  i.e. a national/regional firm.

Most IFAs are small independent firms of 1-5 advisers.   Most of the ones I know are running at or near capacity, don't advertise and live on reputation and unprompted referrals and having served the same families for decades.

The chains, on the other hand, tend to pay their advisers poorly  (one in our area sees the adviser keep just 20% of the fee income for anything they provide) and are often the advisers are relatively new to the job and looking to build client banks that they can take with them when they leave to join or set up an independent IFA.     Some of these chains operate sales models.  Sales models are not as intense as they used to be as the FCA has tried to quash that culture but some linger.  They are not that common with national/regional IFAs but more typical with FAs.

Are you sure it was an IFA?  Your reference to "big enough" would rule out probably 99% of IFA firms as there is only a handful of large IFA firms.  I know you said they are IFAs but research has found over half of people who saw FAs, thought they were seeing an IFA.  And plenty of times on here we have seen people say they saw an IFA only for it to be an FA.

Your reference to "free report" sounds unusual as well.  IFAs don't tend to issue free reports as you pay an IFA for advice.    Receiving that advice free would mean you no longer have to pay for it.   That would be a bizarre business model.  Was it really a personalised report or some generic text?

I was looking at nutmeg active tbh

An independent IFA would have little difficulty coming in at a similar price and solution while offering all the benefits of advice, planning and handholding. If you are considering Nutmeg after seeing an IFA, something has gone wrong.  Nutmeg is great for small values and people that value an app ahead of the portfolio but when you are paying similar to what advised solutions would be including the cost of advice, then its not great value.    There are better DIY solutions if you want to DIY.

crv1963

Nebulous2 said:

I'm surrounded by people who would fit into group 1.  Many of them are in public sector roles, cruising along quite merrily with very little thought about pensions. They don't need to though, as their DB pensions will be there when needed.  They find it impossible to appreciate the value of what they have. I've tried to point out to some of them that their pension is probably worth more than their home, but they can't grasp that. 

I work in the public sector and you're right. I hear constant moans around payday about the amount of deductions people have for the pension scheme and get looks of amazement when I try to explain what good value for money that they are getting, not just their pension but the death in service and survivors pension as well. Some do grasp it and some do try to increase it- also excellent value for money IMHO.

Others don't and leave the pension schemes and prefer to have their nails done and the like!

For OP I understand the brain freeze, I had a similar feeling when looking to sort out my wifes pensions, I would suggest take some time to read a bit more, ask questions and then decide. I'm not qualified to comment about the IFA or FA that you saw, but when we rang two local to us IFAs they weren't interested in our business as the sums of money involved at the time were not large enough. One offered to have a look but was very clear that the fees would be better place in a pension or ISA than spent on advice. Told me that generally they don't look at portfolios that are under 500k.

Bravepants

dunstonh said:

Yes completely independent.
They are big enough to whether someone not following through on their report with them I guess!!
I feel pretty railroaded by their calls at times and told them to stop

You make it sound like they are not an "independent" IFA but a chain IFA.  i.e. a national/regional firm.

Most IFAs are small independent firms of 1-5 advisers.   Most of the ones I know are running at or near capacity, don't advertise and live on reputation and unprompted referrals and having served the same families for decades.

I was debating whether to create a new thread about this, but I then I thought it is actually quite pertinent to the main theme here...

My partner recently attended a pensions review at her workplace. The review was done by a company called Weath at Work. I thought it was the name of some scheme that was dedicated to employers looking to provide financial services and pensions to their employees via their workplace - hence "Wealth at Work". The main objective of the meeting from my partner's point of view was to determine whether AVCs would be of benefit (she is a member of a Local Government Pension Scheme). But it turns out that was only a small part of the meeting.

The adviser she spoke to went through all her finances (she already has a SIPP and ISAs) and provided a free report and is requesting that she sign a letter giving the team the go ahead to access various information from the various companies with which she has her personal investments. The letter she has to sign has blanks in the addresses, so sign the letter once and it seems the company will create multiple copies each addressed to each of the companies holding my partner's investments.

Having looked at the company's website it is a large company of financial advisers and managers and the company name is meant to signify a person's wealth working to provide a secure future. So a slightly misleading company name, especially when it was presented to my partner through her workplace.

Wealth at Work has 96 advisers on its books and 11 investment managers including the director.

A quote from their FAQs on their website says:

"As we operate on a discretionary basis, we are not only free to use the financial products from all financial institutions (the same as an Independent Financial Adviser), but by employing professional Investment Managers, we can also invest directly into the underlying investments of these products i.e. directly into investments such as corporate bonds, gilts and shares. Therefore, we can establish truly bespoke investment portfolios for our clients, choosing investments from the whole investment universe and importantly, without any restrictions."

The text in bold seems to indicate that this company is NOT an IFA. It is the only place I have found on their website that states anything about their independence or otherwise.

I'm sure my partner will not feel pressued into doing anything with this company, but I'm sure a smaller company of IFAs would be preferable as you have said dunstonh. I'm worried that she is doing the right things with her money as she has something upward of mid six figures to manage.  

FIREDreamer

crv1963 said:

Others don't and leave the pension schemes and prefer to have their nails done and the like!

🙄

The taxpayer thanks them. 😂😂😂

dunstonh

but when we rang two local to us IFAs they weren't interested in our business as the sums of money involved at the time were not large enough. One offered to have a look but was very clear that the fees would be better place in a pension or ISA than spent on advice. Told me that generally they don't look at portfolios that are under 500k.

£500k is very high.  I have seen £250k but more typically its around £100k.     

A quote from their FAQs on their website says:

"As we operate on a discretionary basis, we are not only free to use the financial products from all financial institutions (the same as an Independent Financial Adviser), but by employing professional Investment Managers, we can also invest directly into the underlying investments of these products i.e. directly into investments such as corporate bonds, gilts and shares. Therefore, we can establish truly bespoke investment portfolios for our clients, choosing investments from the whole investment universe and importantly, without any restrictions."

The text in bold seems to indicate that this company is NOT an IFA. It is the only place I have found on their website that states anything about their independence or otherwise.

They are not IFAs.  They are FAs (restricted) and do not offer the same as an IFA.    They retail their own branded products and their own investment DFM service.

They also charge VAT on their advice charges even though intermediation is non-vatable.  IFAs won't be charging VAT.



That is very expensive even before you put VAT on.

For example, IFA option for annual ongoing:   IFA 0.50%.   Investments 0.09%, DFM 0.09%.  Platform 0.15% and no VAT on any of it = 0.83% p.a.     (IFAs also don't have to use DFMs but can choose any from the marketplace.  And IFAs can use advisory portfolios rather than DFMs).

Its worth noting that their own-brand DFM can select from the marketplace but that is no different to most restricted FA offerings.  Even SJP could say the same.   The difference is that an IFA can pick from any DFM that offers services to the whole of market as well as picking any investments available to the whole of market.   Whereas an FA gets only their in-house offering.

For example:  here you have morningstars's DFM listing:
https://www.managed-portfolio.com/data
Its not comprehensive and an awful lot of firms are missing and the filter options are very basic as you need to pay to get more details/options.  However, there are a lot of DFMs on that list and if you click on 3 year performance annualised, it will sort in order.

If you go to an FA, you are in their option.  If you go to an IFA, you have the lot available to you.
Restricted options won't appear in tables 

Bravepants

dunstonh said:

They are not IFAs.  They are FAs (restricted) and do not offer the same as an IFA.    They retail their own branded products and their own investment DFM service.

They also charge VAT on their advice charges even though intermediation is non-vatable.  IFAs won't be charging VAT.



That is very expensive even before you put VAT on.

For example, IFA option for annual ongoing:   IFA 0.50%.   Investments 0.09%, DFM 0.09%.  Platform 0.15% and no VAT on any of it = 0.83% p.a.     (IFAs also don't have to use DFMs but can choose any from the marketplace.  And IFAs can use advisory portfolios rather than DFMs).

Its worth noting that their own-brand DFM can select from the marketplace but that is no different to most restricted FA offerings.  Even SJP could say the same.   The difference is that an IFA can pick from any DFM that offers services to the whole of market as well as picking any investments available to the whole of market.   Whereas an FA gets only their in-house offering.

For example:  here you have morningstars's DFM listing:
https://www.managed-portfolio.com/data
Its not comprehensive and an awful lot of firms are missing and the filter options are very basic as you need to pay to get more details/options.  However, there are a lot of DFMs on that list and if you click on 3 year performance annualised, it will sort in order.

If you go to an FA, you are in their option.  If you go to an IFA, you have the lot available to you.
Restricted options won't appear in tables 

Thank you very much for that dunstonh, much appreciated.

Bostonerimus1

Bravepants said:

dunstonh said:

Yes completely independent.
They are big enough to whether someone not following through on their report with them I guess!!
I feel pretty railroaded by their calls at times and told them to stop

You make it sound like they are not an "independent" IFA but a chain IFA.  i.e. a national/regional firm.

Most IFAs are small independent firms of 1-5 advisers.   Most of the ones I know are running at or near capacity, don't advertise and live on reputation and unprompted referrals and having served the same families for decades.

I was debating whether to create a new thread about this, but I then I thought it is actually quite pertinent to the main theme here...

My partner recently attended a pensions review at her workplace. The review was done by a company called Weath at Work. I thought it was the name of some scheme that was dedicated to employers looking to provide financial services and pensions to their employees via their workplace - hence "Wealth at Work". The main objective of the meeting from my partner's point of view was to determine whether AVCs would be of benefit (she is a member of a Local Government Pension Scheme). But it turns out that was only a small part of the meeting.

The adviser she spoke to went through all her finances (she already has a SIPP and ISAs) and provided a free report and is requesting that she sign a letter giving the team the go ahead to access various information from the various companies with which she has her personal investments. The letter she has to sign has blanks in the addresses, so sign the letter once and it seems the company will create multiple copies each addressed to each of the companies holding my partner's investments.

Having looked at the company's website it is a large company of financial advisers and managers and the company name is meant to signify a person's wealth working to provide a secure future. So a slightly misleading company name, especially when it was presented to my partner through her workplace.

Wealth at Work has 96 advisers on its books and 11 investment managers including the director.

A quote from their FAQs on their website says:

"As we operate on a discretionary basis, we are not only free to use the financial products from all financial institutions (the same as an Independent Financial Adviser), but by employing professional Investment Managers, we can also invest directly into the underlying investments of these products i.e. directly into investments such as corporate bonds, gilts and shares. Therefore, we can establish truly bespoke investment portfolios for our clients, choosing investments from the whole investment universe and importantly, without any restrictions."

The text in bold seems to indicate that this company is NOT an IFA. It is the only place I have found on their website that states anything about their independence or otherwise.

I'm sure my partner will not feel pressued into doing anything with this company, but I'm sure a smaller company of IFAs would be preferable as you have said dunstonh. I'm worried that she is doing the right things with her money as she has something upward of mid six figures to manage.  

What value would this "Wealth at Work" company provide. You have the LGPS and that will give you a good base of retirement income. You have a SIPP and and ISA with some financial firm, bank etc and you are presumably paying into those too. How are those invested? and what fees are you paying? Why do you need another middleman involved charging you more fees? Educate yourself about the LGPS options and how to use the SIPP and ISA to provide long term retirement income and keep contributing as much as you can.

FYI I have a substantial amount in DC pensions and investments and also a good foundation of DB pensions that provides my day to day spending money. I have my DC pension and other money invested in low cost equity index funds and can draw on it when necessary. You and your spouse sound like good DIY candidates and so you'll save maybe 1% a year in fees...which is about 25% of a sustainable withdrawal rate. ie if a retiree withdraws 4% from their DC pension each year and has 1% in fees, they will be paying 25% of their income to a financial advisor and financial firms probably making it their largest single expense.

Bravepants

Bostonerimus1 said:

Bravepants said:

dunstonh said:

Yes completely independent.
They are big enough to whether someone not following through on their report with them I guess!!
I feel pretty railroaded by their calls at times and told them to stop

You make it sound like they are not an "independent" IFA but a chain IFA.  i.e. a national/regional firm.

Most IFAs are small independent firms of 1-5 advisers.   Most of the ones I know are running at or near capacity, don't advertise and live on reputation and unprompted referrals and having served the same families for decades.

What value would this "Wealth at Work" company provide. You have the LGPS and that will give you a good base of retirement income. You have a SIPP and and ISA with some financial firm, bank etc and you are presumably paying into those too. How are those invested? and what fees are you paying? Why do you need another middleman involved charging you more fees? Educate yourself about the LGPS options and how to use the SIPP and ISA to provide long term retirement income and keep contributing as much as you can.

FYI I have a substantial amount in DC pensions and investments and also a good foundation of DB pensions that provides my day to day spending money. I have my DC pension and other money invested in low cost equity index funds and can draw on it when necessary. You and your spouse sound like good DIY candidates and so you'll save maybe 1% a year in fees...which is about 25% of a sustainable withdrawal rate. ie if a retiree withdraws 4% from their DC pension each year and has 1% in fees, they will be paying 25% of their income to a financial advisor and financial firms probably making it their largest single expense.

Thanks Bostonerimus. As a regular reader of your posts you are preaching to the converted.  

We are DIYers at the moment, and I'm happy to remain so. But morally I can't speak for my partner as she has to make her own mind up. I think she would benefit from a review by IFA, but certainly not someone who is a biased salesperson.  

jazzy23

crv1963 said:

Nebulous2 said:

I'm surrounded by people who would fit into group 1.  Many of them are in public sector roles, cruising along quite merrily with very little thought about pensions. They don't need to though, as their DB pensions will be there when needed.  They find it impossible to appreciate the value of what they have. I've tried to point out to some of them that their pension is probably worth more than their home, but they can't grasp that. 

I work in the public sector and you're right. I hear constant moans around payday about the amount of deductions people have for the pension scheme and get looks of amazement when I try to explain what good value for money that they are getting, not just their pension but the death in service and survivors pension as well. Some do grasp it and some do try to increase it- also excellent value for money IMHO.

Others don't and leave the pension schemes and prefer to have their nails done and the like!

For OP I understand the brain freeze, I had a similar feeling when looking to sort out my wifes pensions, I would suggest take some time to read a bit more, ask questions and then decide. I'm not qualified to comment about the IFA or FA that you saw, but when we rang two local to us IFAs they weren't interested in our business as the sums of money involved at the time were not large enough. One offered to have a look but was very clear that the fees would be better place in a pension or ISA than spent on advice. Told me that generally they don't look at portfolios that are under 500k.

@CRV1693
That's interesting  you had an ifa who said don't bother if under 500K. The pension is worth 200K. Its my only pension. Hence the anxiety. I can see how the costs eat it. Another friend used an ifa and got good returns as she really isn't bothered in self investing.