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Pension Options and IFA advice

HI Board 
Firstly  , I am a novice in relation to pensions and investing , other than cash isa and fixed rate investment is all i have done myself thus far
I am semi retired with 4 pensions , total value circa £310k , plus a small defined benefits pension.
I have not taken anything from any pensions yet.
My needs are relatively basic as we have other sources of income via my wifes holiday let business and others.
I would want around £12k a year or upto the basic rate allowance max.
I under took some advice through an  IFA , on the basis I wanted simplification and also some flexibility as my current pensions other than 1 Sipp held with Penfold does not allow flexi access draw down. This was taken out so  I could pay a company contribution from my limited company as an director.
The other providers are Clerical Medical, Prui and Fidelity which is a closed company scheme  ,So the recommendation of the IFA was to set up a new pension with Quilter  CRA, on the face of it it looks like a suitable option.
However the IFA has adviser charges on top ,

  • The arrangement fee being 2.8 % of the combined value -  which equates to circa £8.5k
  • Ongoing adviser fee of 0.75% £2327
  • Quilter is 0.46 #  £1372.00
First question
 This seems a bit high, the arrangement fee ? ,  from the analysis I have done , it would suggest a fee between 1-2 % percent on my value is the average for the arrangement fee.
The others are it would appear reasonable?.
2nd is Quilter and their product collective retire account , and the fund selected HSBC Global Strategy Balanced Portfolio Accumulation C ,  any feed back on both the company and the fund selection and the product, it does offer flexi-access.
I have currently paid for the 1 off advice and I am holding off proceeding further.
Any advice or opinion welcome .
I would like to maybe more involved in my own choices subject to learning , now I have more time allegedly :)
But my inexperience would tell me I would probably be better suited to a semi or managed product,
Thanks,

«1

Comments

  • gm0
    gm0 Posts: 1,074 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper
     >    The arrangement fee being 2.8 % of the combined value -  which equates to circa £8.5k
     >   Ongoing adviser fee of 0.75% £2327
     >  Quilter is 0.46 #  £1372.00

    This smells somewhat like "not an IFA". i.e. a tied FA.  Selling Quilter only.
    Tied products are usually (not always but often) more expensive than adviser introduced products from independents.

    My personal benchmark view of market price (consumer)

    2.8% should be approximately 1% or less
    0.75% should be closer to 0.5% by shopping for an actual independent adviser if you feel you need one (And capped)
    0.46% should be more like ~0.3%

    So this is about 1.8% of pot too expensive on the way in.  And 0.41% of pot too much each year.

    Say 40 years product life - area under curve for cost drag - deaccumulation full to zero net returns and drag. 
    1/2 portfolio value x 40 x 0.41% = £25,000 more costs drag on returns expensive that it really should be over the life of the pension As an ongoing, managed, advised setup. 

    And £56,000 (+£8,500 initial charge more expensive than DIY). £64,000 more

    For DIY the charges should be roughly

    0 initial (cost is your time deciding and form filling (work to get confident to do it - is real - transfers and setup not actually difficult tasks.  Less difficult than buying a house or probate. It's a choice to spend the time to be ready to it and the value this represents - vs outsourced cost you place on it)

    0 for advice - not taken

    0.3% (all in.  passive(ish) approach, platform fees included.

    Forum advice is generally to find a proper market price independent.  Or DIY.

    Value of the advice is almost always external to the product.  Tax rules advice to family situation etc.  Most IFA introduced pensions (for most of us) don't have unique unicorn asset allocations.  Nor do they have wildly different prices to hold the portfolios.  0.3% to go a do it.  And 0.8% to have it done with advice.  Is a price for the other relationship value of having the adviser attend to your financial planning needs and legislative changes.
  • Just on the IFA without naming them personally  , they are part of  or under the Hexagon Wealth umbrella and marketed as a fully independent full market IFA 
    Thanks.


  • Any recommendations on a proper market price independents any one has used with a good outcome  , welcome also , although taking into account  I have already paid for the first tranche of advice , which after all seems not to be that independent or value driven in the first instance.
    I guess one bitten / twice shy :)
  • mooby77 said:
    Just on the IFA without naming them personally  , they are part of  or under the Hexagon Wealth umbrella and marketed as a fully independent full market IFA 
    Thanks.


    Not Hexagon Financial Services?  Who have a Wealth page on their website with this statement on 😳

    We work with our specialist partners at St James Place Wealth Management to provide you with tailored pensions advice
  • mooby77 said:
    Just on the IFA without naming them personally  , they are part of  or under the Hexagon Wealth umbrella and marketed as a fully independent full market IFA 
    Thanks.


    Not Hexagon Financial Services?  Who have a Wealth page on their website with this statement on 😳

    We work with our specialist partners at St James Place Wealth Management to provide you with tailored pensions advice
    I cannot post the link , but their number is FCA Reg :483403
  • MallyGirl
    MallyGirl Posts: 7,092 Senior Ambassador
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    mooby77 said:

    2nd is Quilter and their product collective retire account , and the fund selected HSBC Global Strategy Balanced Portfolio Accumulation C ,  any feed back on both the company and the fund selection and the product, it does offer flexi-access.
    I can't comment on Quilter but you could DIY and choose that HSBC fund and not pay any further advisor fees. It is a fairly popular multi asset fund
    I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
    & Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
    All views are my own and not the official line of MoneySavingExpert.
  • Albermarle
    Albermarle Posts: 25,993 Forumite
    10,000 Posts Sixth Anniversary Name Dropper
    All they have done is recommend that you put all your money into one popular low cost multi asset fund.
    On the positive side they have not tried to put you into an overcomplicated and expensive portfolio, but now you have the chance to easily cut them out, by investing yourself into this easily available fund on one of the well known modern SIPP platforms that allow drawdown.
    Total cost between say 0.3% and 0. 5%. pa 
  • ComicGeek
    ComicGeek Posts: 1,619 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    I made the decision to DIY recently rather than paying IFA fees - but I'm 20+ years from retirement, and my decision would have been very different if I was wanting to take money from a number of different pensions and with a slightly more complicated mix of household income.

    Ultimately you're paying for someone to help you with that process. The advisor is working harder for their fees in your case than someone with a single DC pension pot 20+ years from retirement and still working.

    Do you trust and get on with the IFA? Have they answered questions clearly? Are you willing to pay for the convenience of someone else managing it?

    Personally I don't think that a single multi asset fund at 40-60% equities would be the right choice for me, as I would want to break down the pot as short, medium and long term investments as different funds and different risk levels. It's an over simplified strategy IMO, which isn't normally what IFAs are blamed for.
  • Well I think OP has their answer - obscenely expensive. The gravy train rolls on for some advisors
  • ComicGeek said:
    I made the decision to DIY recently rather than paying IFA fees - but I'm 20+ years from retirement, and my decision would have been very different if I was wanting to take money from a number of different pensions and with a slightly more complicated mix of household income.

    Ultimately you're paying for someone to help you with that process. The advisor is working harder for their fees in your case than someone with a single DC pension pot 20+ years from retirement and still working.

    Do you trust and get on with the IFA? Have they answered questions clearly? Are you willing to pay for the convenience of someone else managing it?

    Personally I don't think that a single multi asset fund at 40-60% equities would be the right choice for me, as I would want to break down the pot as short, medium and long term investments as different funds and different risk levels. It's an over simplified strategy IMO, which isn't normally what IFAs are blamed for.
    I had two meeting with the IFA , once the initial free of charge meeting , then secondly to review the proposal.He seems a nice enough chap and has good reviews and has won awards , industry wise , which like any type of industry award is like marking you own homework.

    Per the terms and condition ,  the advice and proposal for which I am in receipt of was chargeable if I decided to not progress , in hindsight , probably too high = £2k but obviously too late now , and I of course expected to pay something
    What started to cause me to question was the proposal and what appeared to be the simplistic nature of it and the arrangement fee which just seems to be so high for something so basic.
    I understand the ongoing advice benefits and the costs of an IFA if they add value and  if that is what my situation requires,
    It appears there are IFA that are reasonable  and good value and then that are just overpriced , looks like I made the selection of an overpriced one and fell for the spiel :)
    I think with a bit of support and confidence I could go down the DIY route , even to match the plan provided via a appropriate SIPP per what has been mentioned, 
    Thanks everyone 
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