Not Proceeding With IFA Advice?

dunstonh

alfapersius said:

Thanks @dunstonh. My pot is just over £400k. And I think you have highlighted the root of my concern, they are and IFA but seem to be tying all their customers into using a Pershing SIPP with discretionary management on top so the charges are higher.

At £400k, the charges I gave in my example are a closer benchmark for you to go by.   And an initial charge of around £3000-£4000 would be ballpark target.

Pershing is an unusual choice for an IFA.  Its available to IFAs but  the Lang Cat State of the Nation 2025 report for IFAs listed the top 29 platforms used by IFAs that responded to Lang Cat's research (Lang Cat is one of the big ones when it comes to benchmarking and industry comparisons etc).   Pershing isn't on that list.     Pershing is aimed more at wealth management firms wanting to put the bulk or all of their business in one place and use a specific DFM rather than general practitioner IFA firms who tend to research and recommend on an individual basis.     It's one of the key differences between the business models of "independent" IFAs and national wealth management firms.

The use of DFM is an additional layer of cost.   However, that doesn't mean it's more expensive.   For example, a DFM that I sometimes use has a 0.09% DFM charge and fund OCFs of 0.08%, giving a total cost of 0.17% for a multi-asset portfolio.  That is cheaper than the cheapest multi-asset funds available.     Some DFMs have fixed charges.   One has a fixed £20pm charge (which equates to 0.06% on 400k) with a portfolio OCF of 0.10%.  So, 0.16% total.

alfapersius

Thanks again, it’s a lot to take in for what is one of the biggest financial decisions I’ll ever make. It’s rather daunting when it’s a topic I have little knowledge or experience of (While I work for Fidelity I’m in the technology team, no involvement in the investment side of things).

Albermarle

alfapersius said:

Thanks again, it’s a lot to take in for what is one of the biggest financial decisions I’ll ever make. It’s rather daunting when it’s a topic I have little knowledge or experience of (While I work for Fidelity I’m in the technology team, no involvement in the investment side of things).

Reading through this forum regularly should improve your knowledge. You will also see links posted sometimes to useful You Tubers on personal finance.
I think one thing is clear the charges you have quoted are too high and you can get lower charges from other IFA's, or even cheaper if you DIY.
BY the way your employer offers a financial advice service for their Personal Investing side at least . It is tied to Fidelity, so not an IFA, but charges are quite reasonable I think. 

Oldhand_2

My spouse had, until a few months ago, a SIPP with AFH in a Discretionally Managed account, although a lesser pot than the O/P's. The FA from AFH is a charming fellow, but I wouldn't say he is an IFA. He's employed by AFH and sells what they offer. He said he was not allowed to help expedite our transfer out (but he did anyway).

AFH's setup is perplexing. You logon to AFH's portal to see the state of the funds, the payments come from Curtis Banks, you complain to Suffolk Life, and the paperwork names the SIPP as Pershing, whatever they are or do.

The SIPP was tranferred to AFH years ago when our IFA retired to Spain partly on our commission. For some time we thought that AFH's fees were a little high, and the returns over five years were worse, far worse, than several global index trackers. We were paying some £1,250 pa to AFH in management and platform fees (on £105k). So we decided to transfer the SIPP to a DIY provider and split the funds between two global indexes.

Whilst waiting for the transfer to go through - a long nerve-wracking process - I looked a little more closely at the quarterly reports from AFH. I discovered that Curtis Banks were charging £336 pa for running the SIPP, on top of the £1,250 AFH fee. Furthermore there were a number of other charges made by Curtis banks over the last nine years amounting to over £2,000. I have to this day no idea what these charges were for, and neither does our AFH FA. The SIPP portfolio held around fifty stocks, and the thansaction rate was around 30 to 50 a month.

I don't think we would have had the nerve to transfer the SIPP unless we had had some experience with other lesser investments, and read quite a lot on this forum, so I cannot advise the O/P what to do. Apart from take it steady.

alfapersius

Thanks @Oldhand_2, it’s good to get some feedback from someone who has used AFH. I’ve looked online most reviews seem positive but there are a few which have a very poor experience like yourself.

Albermarle

Oldhand_2 said:

My spouse had, until a few months ago, a SIPP with AFH in a Discretionally Managed account, although a lesser pot than the O/P's. The FA from AFH is a charming fellow, but I wouldn't say he is an IFA. He's employed by AFH and sells what they offer. He said he was not allowed to help expedite our transfer out (but he did anyway).

AFH's setup is perplexing. You logon to AFH's portal to see the state of the funds, the payments come from Curtis Banks, you complain to Suffolk Life, and the paperwork names the SIPP as Pershing, whatever they are or do.

The SIPP was tranferred to AFH years ago when our IFA retired to Spain partly on our commission. For some time we thought that AFH's fees were a little high, and the returns over five years were worse, far worse, than several global index trackers. We were paying some £1,250 pa to AFH in management and platform fees (on £105k). So we decided to transfer the SIPP to a DIY provider and split the funds between two global indexes.

Whilst waiting for the transfer to go through - a long nerve-wracking process - I looked a little more closely at the quarterly reports from AFH. I discovered that Curtis Banks were charging £336 pa for running the SIPP, on top of the £1,250 AFH fee. Furthermore there were a number of other charges made by Curtis banks over the last nine years amounting to over £2,000. I have to this day no idea what these charges were for, and neither does our AFH FA. The SIPP portfolio held around fifty stocks, and the thansaction rate was around 30 to 50 a month.

I don't think we would have had the nerve to transfer the SIPP unless we had had some experience with other lesser investments, and read quite a lot on this forum, so I cannot advise the O/P what to do. Apart from take it steady.

You seem to have made a good move generally, but just regarding the comment in bold.

Global index trackers are a relatively higher risk investment, and their potential volatility can be quite scary for many people.
When you first had dealings with the IFA, you may have indicated a preference for more middle of the road investments ( most people do ) which in the long term have given less growth than a more high risk strategy. This then continued when it transferred to AFH.
As far as I can see advisors do not normally recommend 100% equity investments, as clients get very agitated when they suddenly drop very quickly.

dunstonh

As far as I can see advisors do not normally recommend 100% equity investments, as clients get very agitated when they suddenly drop very quickly.

The FOS considers most consumer to be cautious.    Statistically, most consumers invest around the medium/balanced profile.  Those that invest 100% in global equities are probably around 10% of investors in the UK.