Do I really need an IFA to draw my pension?

coyrls

quantum said:

coyrls said:

The hard truth is that you will struggle to find an IFA that would taken on somebody who is unemployed with £200K in their pension pot.

Because? Please explain.

I suspect that they wouldn't see you as an attractive prospect.  Although the total you have in your pension is above most IFA's minimum (£50,000 to £100,00 is quoted here https://www.thisismoney.co.uk/money/financial-planning/article-13799273/Do-need-financial-adviser-wealth-manager.html), I think the fact that your pension is at its maximum now and will decline over time as you make withdrawals means that you will be seen as less of a prospect than somebody whose assets will increase over time.  I could be wrong.

Ibrahim5

Yes an IFA business wants as much AUM (assets under management) as possible from as small a number of customers as possible all being charged as much as possible. Then they can sell all their customers to someone like True Potential and retire themselves. Customers are thrown under the bus but the IFAs don't care.

Cobbler_tone

In the 'old days' your IFA would turn up in a nice car and sell you a life insurance policy, showing you the £1.50 a month they would make whilst you had it and maybe a signing on commission. Now most people would do their own with a few clicks.
I'd imagine the days of mortgage advisors look very different too.
The most recent example I have heard (maybe not an IFA/FA) are firms visiting WI meetings to get people to put 50% of their property into trust when the first one passes. Not cheap either.

So in a nutshell, there is absolutely no way of knowing if a small IFA is going to do a good job for you? I can see why that profession has totally changed over the years with the internet and ability to self serve. The issue is that a lot of people who do use them then don't have the basic knowledge to know whether they have done a good job, so you can't really rely on your mates recommendation.

TBF I would imagine most people don't need one. Just listen to Martin Lewis, buy gold or put it in ITV shares. 

Joking aside, the older people I know wouldn't let anyone touch their money and have done alright with the products readily available on the market. 

Kudos to those small, hard working IFA's though and I am sure it is a tough business. After all, we are all just trying to make a living....don't start me on estate agents though....

FIREDreamer

Ibrahim5 said:

Yes an IFA business wants as much AUM (assets under management) as possible from as small a number of customers as possible all being charged as much as possible. Then they can sell all their customers to someone like True Potential and retire themselves. Customers are thrown under the bus but the IFAs don't care.

lol lol lol

Qyburn

Cobbler_tone said:

So in a nutshell, there is absolutely no way of knowing if a small IFA is going to do a good job for you? 

That was what put us off. All we knew is that they typically wanted a 3% fee for reviewing our pensions, saving and drawing up a retirement plan. Plus some confident waffle about us saving at least that much in tax. It's a shame they don't offer staged advice, initially explanatory discussions for a few hundred (or even a couple of thousand) so you can see how you get on. Rather than having to blindly chuck nearly £20k to them and hope it works out well.

quantum

Now I'm even more confused. At the start of this thread most people were saying yes I need to take advice. Now it's the opposite vibe. That IFAs are just lining their own pocket and the value is questionable. 
I hope Pensionwise can help me in a couple of hours.
In my very unknowledgeable head I have money invested in whatever with my current Pensions. There's the various options to draw on them as part of all. What's the point of an IFA in this scenario? I just need to make a decision on...
My biggest pot options...
1. Max cash sum and reduced Pension
2. Annual Pension, no Cash lump
2a. Max Cash Sum and additional bridging pension payable till State Pension Date (I'm 62 and therefore it's 67).
2b An additional bridging pension payable till SPD and no cash sum
3. Transfer Value

dunstonh

Now I'm even more confused. At the start of this thread most people were saying yes I need to take advice. Now it's the opposite vibe. That IFAs are just lining their own pocket and the value is questionable. 

One poster who is so anti-IFA that the regulars have him on ignore or yawn at his posts, should not be taken seriously.

I hope Pensionwise can help me in a couple of hours.

Probably not.  Pensionwise cannot give advice and it does not cover all options and doesn't going into combination of options.   Its good for people with simple needs but if your scenario is best suited with phasing or multi-wrapper solutions then pensionwise will not be that valuable.

What's the point of an IFA in this scenario?

We don't know the scenario.    
What is the point of a decorator?  some don't need one. Some do
What is the point of a gardener? 
what is the point of an accountant?
what is the  point of a mechanic?

It all boils down to an ability to DIY or not.    And if you DIY, how good you can do it.   I have seen some very good DIY investors over the years and some that have made expensive mistakes.    HL, the largest DIY platform, usually has its own branded funds in its top 10 sales lists.    It's own branded funds are more expensive than what an IFA can arrange.   So, those people going DIY are paying more but probably think they are saving money.     So, can you DIY effectively or not?

My biggest pot options...
1. Max cash sum and reduced Pension
2. Annual Pension, no Cash lump
2a. Max Cash Sum and additional bridging pension payable till State Pension Date (I'm 62 and therefore it's 67).
2b An additional bridging pension payable till SPD and no cash sum
3. Transfer Value

don't focus on what solutions a particular provider/pension may offer.  Focus on the solutions that suit your objectives.

Cobbler_tone

quantum said:

Now I'm even more confused. At the start of this thread most people were saying yes I need to take advice. Now it's the opposite vibe. That IFAs are just lining their own pocket and the value is questionable. 
I hope Pensionwise can help me in a couple of hours.
In my very unknowledgeable head I have money invested in whatever with my current Pensions. There's the various options to draw on them as part of all. What's the point of an IFA in this scenario? I just need to make a decision on...
My biggest pot options...
1. Max cash sum and reduced Pension
2. Annual Pension, no Cash lump
2a. Max Cash Sum and additional bridging pension payable till State Pension Date (I'm 62 and therefore it's 67).
2b An additional bridging pension payable till SPD and no cash sum
3. Transfer Value

I think that Pensonwise will help you to understand all of your options available and hopefully give you the confidence to research and make your own decision. With a couple of pots it sounds as though you will be armed with what you need to do it yourself. I personally liked my call with them. It may not have given too much you may already know but it gives you confidence.
Sometimes it is easy to think you are missing a trick and an IFA is going to create a magic money tree. As long as you understand the options and make rational decisions you will be fine and giving up a % of your wealth when you don't need to. It is going to depend on which option is attractive/makes sense for you. You'll probably reach the conclusion that just "cashing them in" might not be the best one.

kempiejon

quantum said:

I'm 62 and out of work, so not a tax payer. I have been having trouble finding some part time work and have been using up my savings to make up the shortfall in expenses. 
Been thinking maybe I ought to start drawing my pension. I have two separate ones with a value of about £200k.
I'm very clueless about pensions and just presumed it would be straightforward to cash them in. However someone I know who used to be an IFA said I ought to get advice from an IFA listed on Unbiased as they would be able to help re tax purposes.
Is it really necessary?

Back from the distractions.
I agree no income and an unsed pensions is inefficient Probably be a good idea to look at drawing it - There is tax free income going to waste.. Have you a household budget so you know you what you need to live on? 
Is an IFA needed? No you could DIY. Many do. If you can find an IFA and are worried about DIY they look a good choice.

GenX0212

Qyburn said:

Cobbler_tone said:

So in a nutshell, there is absolutely no way of knowing if a small IFA is going to do a good job for you? 

That was what put us off. All we knew is that they typically wanted a 3% fee for reviewing our pensions, saving and drawing up a retirement plan. Plus some confident waffle about us saving at least that much in tax. It's a shame they don't offer staged advice, initially explanatory discussions for a few hundred (or even a couple of thousand) so you can see how you get on. Rather than having to blindly chuck nearly £20k to them and hope it works out well.

£20k!? Surely you haven't paid that much?