Pension Options and IFA advice

wjr4

Did they not say their fee before they started the work? 

mooby77

wjr4 said:

Did they not say their fee before they started the work? 

Yes they did , so I have no problem with the one off charge  for the "advice" , if I choose not to proceed  obviously I now realise it was probably very high and i should of done more research and shopped around. Their position was it is complex my situation , hence the advice cost , but then the result is a non complex , simple proposal.
What made me question the use of this IFA was the actual end result and proposal/ plan received  , even to the untrained eye , it appeared to be a very basic plan but with a very high arrangement fee , the other fees , Quilter and  the ongoing advice fee of 0.75% if I understand is kind of in the normal range of expectation.
In terms of the arrangement fee , i just cant see the justification of 2.8% of my fund value vs the work or plan selected  This is what led me to question the whole thing.
Thanks,

dunstonh

Quilter platform is used by IFAs as well as Quilter FAs.   Quilter platform started life as the Selestia fund supermarket 20 years ago.   I was one of the early users of that platform.   Skandia bought the Selestia platform and rebranded it to Skandia.  Skandia were one of the first platforms in the UK but their software was showing its age and Selestia's software was good.       Some years later, Old Mutual bought Skandia and rebranded the platform to Old Mutual Wealth.    Until 2013, it was one of the cheapest platforms on the market in the right scenario.        However, the software never really got updated after Selestia and it started to go out-of-date.     Old Mutual decided to leave Europe and broke up the company selling bits off to different providers.  However, the Old Mutual Wealth platform, Intrinsic advice network and Old Mutual funds were carved off into a new company which used the Quilter brand.    The software was moved to FNZ finally.

Quilter is a full service platform.  It can do things that many other platforms refuse to do.  I used them once in the last 12 months as they are one of the few platforms that do disqualifying pension credit.   However, Quilter is quite expensive by current standards  Cheaper than Hargreaves Lansdown but close to double the cost of the lower cost platforms.     Although they do throw around discounts to IFAs who are willing to place sufficient business on platform (many platforms do that).   

Quilter are a good option for transactional clients.  So, that could be a reason why the IFA for the OP is recommending them.       We don't place transactional clients on the lowest cost platform and I suspect that is similar with other IFAs due to the way those platforms are built to work with the IFA and its reflected in their price.

The investment fund is also a good option for transactional clients.   Its not as cheap as what can be obtained for servicing clients but for transactional it is ideal.

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

Quilter's charge would not be 0.46%.   I suspect that the is the the platform charge plus fund OCF & TC.
WIthout any discounting (i.e. standard terms), the Quilter charge would be 0.256% on £310,000.
WIth the fund charges being 0.20% then that gives 0.456% or rounded to 0.46%.

The annual IFA charge is in the ballpark.
The initial IFA charge is expensive.  In monetary terms you should be targetted half that amount or better.

mooby77

dunstonh said:

Quilter platform is used by IFAs as well as Quilter FAs.   Quilter platform started life as the Selestia fund supermarket 20 years ago.   I was one of the early users of that platform.   Skandia bought the Selestia platform and rebranded it to Skandia.  Skandia were one of the first platforms in the UK but their software was showing its age and Selestia's software was good.       Some years later, Old Mutual bought Skandia and rebranded the platform to Old Mutual Wealth.    Until 2013, it was one of the cheapest platforms on the market in the right scenario.        However, the software never really got updated after Selestia and it started to go out-of-date.     Old Mutual decided to leave Europe and broke up the company selling bits off to different providers.  However, the Old Mutual Wealth platform, Intrinsic advice network and Old Mutual funds were carved off into a new company which used the Quilter brand.    The software was moved to FNZ finally.

Quilter is a full service platform.  It can do things that many other platforms refuse to do.  I used them once in the last 12 months as they are one of the few platforms that do disqualifying pension credit.   However, Quilter is quite expensive by current standards  Cheaper than Hargreaves Lansdown but close to double the cost of the lower cost platforms.     Although they do throw around discounts to IFAs who are willing to place sufficient business on platform (many platforms do that).   

Quilter are a good option for transactional clients.  So, that could be a reason why the IFA for the OP is recommending them.       We don't place transactional clients on the lowest cost platform and I suspect that is similar with other IFAs due to the those platforms are built to work with the IFA and its reflected in their price.

The investment fund is also a good option for transactional clients.   Its not as cheap as what can be obtained for servicing clients but for transactional it is ideal.

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

Quilter's charge would not be 0.46%.   I suspect that the is the the platform charge plus fund OCF & TC.
WIthout any discounting (i.e. standard terms), the Quilter charge would be 0.256% on £310,000.
WIth the fund charges being 0.20% then that gives 0.456% or rounded to 0.46%.

The annual IFA charge is in the ballpark.
The initial IFA charge is expensive.  In monetary terms you should be targetted half that amount or better.

Per :Quilter's charge would not be 0.46%.   I suspect that the is the the platform charge plus fund OCF & TC.
WIthout any discounting (i.e. standard terms), the Quilter charge would be 0.256% on £310,000.
WIth the fund charges being 0.20% then that gives 0.456% or rounded to 0.46%.
Yes this is correct.
Thanks

Albermarle

mooby77 said:

wjr4 said:

Did they not say their fee before they started the work? 

Yes they did , so I have no problem with the one off charge  for the "advice" , if I choose not to proceed  obviously I now realise it was probably very high and i should of done more research and shopped around. Their position was it is complex my situation , hence the advice cost , but then the result is a non complex , simple proposal.
What made me question the use of this IFA was the actual end result and proposal/ plan received  , even to the untrained eye , it appeared to be a very basic plan but with a very high arrangement fee , the other fees , Quilter and  the ongoing advice fee of 0.75% if I understand is kind of in the normal range of expectation.
In terms of the arrangement fee , i just cant see the justification of 2.8% of my fund value vs the work or plan selected  This is what led me to question the whole thing.
Thanks,

To be clear the cost for the IFA is not really in the actual arranging of the pension, but the time spent on all the preliminary stuff. Interviews, asking questions, plenty of paperwork to process as they are highly regulated.
They can not offer any advice until they have the full picture.
Not saying the fee was correct ( clearly it was on the high side) but just thought it was worth clarifying that.

mooby77

so , if i chose not to proceed and walk away, with the plan and all analysis done £2k , or accept and pay an arrangement fee of £8.5k , so clearly the bulk of work was done , , somewhere like 6.5k for some paperwork and setting up,  nice work if you can get it , I had within an hour of leaving the meeting a quilter account email. I counted around 8 forms in total I signed in regards transfer approval etc 
I have advised IFA I am not proceeding , so just the 1 off charge to be paid  , I will arrange a SIPP myself with the fund advised covering a transfer of 3 of my pensions ,  I will keep my Fidelity scheme as it is , as it is relatively low cost , it is closed to me to pay in anything further but is performing well.

Albermarle

mooby77 said:

so , if i chose not to proceed and walk away, with the plan and all analysis done £2k , or accept and pay an arrangement fee of £8.5k , so clearly the bulk of work was done , , somewhere like 6.5k for some paperwork and setting up,  nice work if you can get it , I had within an hour of leaving the meeting a quilter account email. I counted around 8 forms in total I signed in regards transfer approval etc 
I have advised IFA I am not proceeding , so just the 1 off charge to be paid  , I will arrange a SIPP myself with the fund advised covering a transfer of 3 of my pensions ,  I will keep my Fidelity scheme as it is , as it is relatively low cost , it is closed to me to pay in anything further but is performing well.

You might be able to arrange with Fidelity to move you over to their retail side ' Fidelity Personal Investing'