IFA wants to increase charge on existing pension

tacpot12

Given your return on your investment ist likely to be no more than 6% or so, and extra 0.5% of charges represents another 8% of your return. 

jim8888

This is a thread that seems to highlight the fact that learning how to manage your money is one of the best investments you can make, and not just on the financial side. It seems to me that many IFAs are good salespeople who probably have convinced themselves that they do work hard in their client's interests, and many of them do. I know my mum and dad were reluctant to ditch their IFA because "he's such a nice bloke" (he always sent a Christmas card too.) So dealing with an IFA can be an emotional stress as well as a financial one.

Beddie

MK62 said:

In the end only you can decide if paying 1% each year to an IFA is worth it or not.......many on here would not think it is, but many of the wider public do (tbh, the people on this board are probably not all that representative of the wider public when it comes to pensions).

Good point, which is why many firms get away with "only" 1% fees as it looks like a small number!

As to the original poster, I would say no. If they insist, then learn about pensions and go DIY. I believe you can access Royal London pension accounts online without an IFA, perhaps worth checking too. But if you could not be bothered with all of that and just accept the increase, you're not alone.

wjr4

jim8888 said:

This is a thread that seems to highlight the fact that learning how to manage your money is one of the best investments you can make, and not just on the financial side. It seems to me that many IFAs are good salespeople who probably have convinced themselves that they do work hard in their client's interests, and many of them do. I know my mum and dad were reluctant to ditch their IFA because "he's such a nice bloke" (he always sent a Christmas card too.) So dealing with an IFA can be an emotional stress as well as a financial one.

This is the same with everything right? If we all had time to DIY, we would. Do you say the same about solicitors & accountants? 

LHW99

With solicitors and accountants, you are generally employing them to see you through specific legal / tax matters, that a non-professional person would (in most cases) have a great difficulty doing.

In terms of investments etc, there are fewer actual legal requirements against DIY, but you need to be prepared learn about what you are intending to do. Perhaps more like plumbing.

Nevertheless, not everyone wants / is able to do that, and if that is the case, an IFA, even an expensive one should protect from gross errors and spammers / fraudulent companies.

Bostonerimus1

wjr4 said:

jim8888 said:

This is a thread that seems to highlight the fact that learning how to manage your money is one of the best investments you can make, and not just on the financial side. It seems to me that many IFAs are good salespeople who probably have convinced themselves that they do work hard in their client's interests, and many of them do. I know my mum and dad were reluctant to ditch their IFA because "he's such a nice bloke" (he always sent a Christmas card too.) So dealing with an IFA can be an emotional stress as well as a financial one.

This is the same with everything right? If we all had time to DIY, we would. Do you say the same about solicitors & accountants? 

I would never pay an IFA because I can do what they do and I think the vast majority of people can too. There will be some specialized circumstances where an IFA is needed and there will always be people who simply want an IFA, but with some basic knowledge managing your money is something that should be relatively simple. I have paid lawyers for estate planning as they have skills and knowledge that I don't and I will pay tax experts if my tax situation becomes more complex than it is now. 

Learning about pensions and investing does take a bit of time, but once the basics are mastered then actually managing your money should take very little time. I DIY and I basically do nothing because I have my asset allocation set appropriately for my circumstances; I use index trackers and do not "trade". In the "Great British Invest Off" thread that's been going since October 2017 I started with a portfolio of 50% US equity, 25% International equity and 25% US bonds. I have averaged a 9% annual return and have done absolutely nothing to "manage" my portfolio. This has put me in the middle of the pack with other active and some passive portfolios, which is exactly where I'd expect to be. My real life portfolio has done considerable better as my bond allocation is 10%, but I also don't spend any time at all managing it.

If you find yourself spending lots of time managing your money then you are doing something wrong.

Albermarle

Bostonerimus1 said:

wjr4 said:

jim8888 said:

This is a thread that seems to highlight the fact that learning how to manage your money is one of the best investments you can make, and not just on the financial side. It seems to me that many IFAs are good salespeople who probably have convinced themselves that they do work hard in their client's interests, and many of them do. I know my mum and dad were reluctant to ditch their IFA because "he's such a nice bloke" (he always sent a Christmas card too.) So dealing with an IFA can be an emotional stress as well as a financial one.

This is the same with everything right? If we all had time to DIY, we would. Do you say the same about solicitors & accountants? 

I would never pay an IFA because I can do what they do and I think the vast majority of people can too. There will be some specialized circumstances where an IFA is needed and there will always be people who simply want an IFA, but with some basic knowledge managing your money is something that should be relatively simple. I have paid lawyers for estate planning as they have skills and knowledge that I don't and I will pay tax experts if my tax situation becomes more complex than it is now. 

Learning about pensions and investing does take a bit of time, but once the basics are mastered then actually managing your money should take very little time. I DIY and I basically do nothing because I have my asset allocation set appropriately for my circumstances; I use index trackers and do not "trade". In the "Great British Invest Off" thread that's been going since October 2017 I started with a portfolio of 50% US equity, 25% International equity and 25% US bonds. I have averaged a 9% annual return and have done absolutely nothing to "manage" my portfolio. This has put me in the middle of the pack with other active and some passive portfolios, which is exactly where I'd expect to be. My real life portfolio has done considerable better as my bond allocation is 10%, but I also don't spend any time at all managing it.

If you find yourself spending lots of time managing your money then you are doing something wrong.

However you could sit some people in a room for a days teaching on these matters, and they would be no wiser at the end of it.
I have a friend ( who was in a commercial environment when working) who employed an IFA to tidy up his pension etc
The IFA seems fine with regular reviews and explanations of why certain actions are taken etc 
I have also explained things as well. However when talking to my friend, it is clear that only about 10% has sunk in .

Bostonerimus1

Albermarle said:

Bostonerimus1 said:

wjr4 said:

jim8888 said:

This is a thread that seems to highlight the fact that learning how to manage your money is one of the best investments you can make, and not just on the financial side. It seems to me that many IFAs are good salespeople who probably have convinced themselves that they do work hard in their client's interests, and many of them do. I know my mum and dad were reluctant to ditch their IFA because "he's such a nice bloke" (he always sent a Christmas card too.) So dealing with an IFA can be an emotional stress as well as a financial one.

This is the same with everything right? If we all had time to DIY, we would. Do you say the same about solicitors & accountants? 

I would never pay an IFA because I can do what they do and I think the vast majority of people can too. There will be some specialized circumstances where an IFA is needed and there will always be people who simply want an IFA, but with some basic knowledge managing your money is something that should be relatively simple. I have paid lawyers for estate planning as they have skills and knowledge that I don't and I will pay tax experts if my tax situation becomes more complex than it is now. 

Learning about pensions and investing does take a bit of time, but once the basics are mastered then actually managing your money should take very little time. I DIY and I basically do nothing because I have my asset allocation set appropriately for my circumstances; I use index trackers and do not "trade". In the "Great British Invest Off" thread that's been going since October 2017 I started with a portfolio of 50% US equity, 25% International equity and 25% US bonds. I have averaged a 9% annual return and have done absolutely nothing to "manage" my portfolio. This has put me in the middle of the pack with other active and some passive portfolios, which is exactly where I'd expect to be. My real life portfolio has done considerable better as my bond allocation is 10%, but I also don't spend any time at all managing it.

If you find yourself spending lots of time managing your money then you are doing something wrong.

However you could sit some people in a room for a days teaching on these matters, and they would be no wiser at the end of it.
I have a friend ( who was in a commercial environment when working) who employed an IFA to tidy up his pension etc
The IFA seems fine with regular reviews and explanations of why certain actions are taken etc 
I have also explained things as well. However when talking to my friend, it is clear that only about 10% has sunk in .

Agreed, people are different. However, I think there is a lot of unjustified fear which stems from a dislike of maths and some parts of the financial services industries making it seem more complex than it is. Combine that with mis-selling and fraud and I can see why some might want or need an IFA. But I stand by my belief that personal finances and investing should be simple and that anyone with a basic understanding on things like percentages and income tax can manage their own affairs. Throw in some comprehension of compound interest and you are flying. Drawdown is probably the most complex situation people will come across and for that more people will probably need advice.

Ibrahim5

Mis-selling and fraud are certainly something you can get from an IFA. I wouldn't say they are things that people need or want.

techno2

Thanks to all,

The 'pot' itself is no more than a slight bulge, at less than 100K and as I'm already over 70 I'll likely cash it in before long. The reason I employed an IFA in the first place was because I was under the impression at the time that I had to do so. I can access the Royal London fund myself. It 's a 'drawdown' fund and It has 3 or so years until it matures. The letter from my adviser does say that the increase means that he can offer a host of new services, none of which I'd noticed that I needed. Can I just tell him I don't need him any longer or does the fact that I agreed to use him mean I have to keep him?

Thanks

Al