Can an IFA withdraw their service to me

QrizB

They are a big concern and regularly advertise on TV.

If they're that big, they'll have thousnads or tens of thousands of clients and the chance of anyone identifying you are minimal.

simprove

https://forums.moneysavingexpert.com/discussion/comment/81927437#Comment_81927437

It's not them I'm worried about, it's my new pension advisor. They are neither national nor large. If someone there happens on this thread they will ID me easily. Anyway the name of the pension fund is not relevant.

dunstonh

I would rather not name it as it may identify me to someone from this new IFA who is aware of my concerns. They are a big concern and regularly advertise on TV.

There is an IFA that advertises on television? I have never seen that (although I am not a big TV watcher). If they are big enough for you to consider them a national and advertising on TV, then you can name them. FAs have some adverts running but most IFA firms are 1-5 advisers.

I just did an AI check and it said: "While you won’t often see an Independent Financial Adviser (IFA) buying a prime-time slot on ITV, several large-scale wealth management firms and industry bodies are currently using TV and major sponsorship to promote financial advice". It named SJP, Fisher, Quilter and HL (none of which are IFAs).

Once a firm exceeds a certain number of advisers, they generally transition from IFA to FA. Partly, this is because the required systems and controls become harder to enforce as the adviser count increases. IFAs are whole of market. Managing 1-5 advisers is straightforward, but with 50, 500, or thousands of advisers, it becomes nearly impossible (as many of the old ex-IFA firms discovered).

Another reason is that large numbers of advisers mean large assets under management. If they become "vertically integrated", this allows to them to operate their own investment platform and investment portfolio and earn not just on the advice side but also on the investment and platform side. They get to earn from you in three places. Whereas an IFA only earns from you in one area.

Now I'm beginning to wonder if they are an IFA. I assumed they were because my old advisor had acted as an IFA and I didn't think he would change the nature of the business when merging with a new company.

I suspect they are not and if so, that is usually a good reason in itself to walk away.

Handover periods for a retiring adviser often start up to a decade in advance. Although 5-7years is more typical.

simprove

@dunstonh

No, it's the pension fund that advertises nationally. I wasn't able to edit my post to make the first paragraph clearer. Is there no edit function here or is it because I'm still a Newbie?

My original IFA said he started planning for retirement in 3 years, but took the planned action within a year, hence the lack of notice to his clients. As it seems this new advising company is not an IFA, they never claimed to be, that might explain why they can't continue to operate my pension for me.

At least my choices are now clearer. I have no experience of investment platforms like this. How risky are they?

dunstonh

No, it's the pension fund that advertises nationally. I wasn't able to edit my post to make the first paragraph clearer. Is there no edit function here or is it because I'm still a Newbie?

Board functionality is reduced for those that are new and have a low post count.

You generally find that the big brand providers are not as competitive as brands you have probably never heard of. There are exceptions to that rule but with most modern pensions being whole of market and many using the same software (7 out of 10 platforms use the same backend software) then often the main differences are the service, software configuration, software front end (what it looks like to use) and cost.

My original IFA said he started planning for retirement in 3 years, but took the planned action within a year, hence the lack of notice to his clients. As it seems this new advising company is not an IFA, they never claimed to be, that might explain why they can't continue to operate my pension for me.

Quicker exits tend to result in the retiring IFA getting less than those who plan years in advance. A firm local to me who I know the owner very well, has just sold his firm but is staying on for a further 5 years. That handover period will yield him several million more than a quick exit.

I think we have hit the nail on the head that, as they are IFAs, they cannot continue servicing a contract that is only available for IFAs.

At least my choices are now clearer. I have no experience of investment platforms like this. How risky are they?

You haven't mentioned which platform it is other than its a big name. Most of the big names are profitable and stable. So, risk is tiny. Unit linked investments are ringfenced from the provider. Its not like banks where the bank has your money. Investment platforms are little more than administrators.

Marcon

Going back to your original question - can an IFA withdraw their service - that's been fully answered: yes.

Turning to the other points you raised initially:

I am retired and have my workplace pension invested with a well established national pension fund. My IFA is retiring soon and has merged his business with a larger firm to provide continuity to his clients. It now turns out this firm has its own pension wrapper product, which it is keen for its new clients to transfer to. I got an offer to transfer my funds at no charge. The returns would be better, there would be more flexibility for me to take control of my investment, but the charges are correspondingly higher.

When my new advisor turned up to present the offer in detail, it transpired that the new IFA was unwilling to continue operating my existing pension arrangement and that service would be withdrawn at some point, leaving me without an IFA. I would either have to deal directly with the pension fund or find a new IFA, willing to take me on the terms I currently have.

and then you went on to say:

Yes, I do need an IFA with the current pension fund. Customers have very little access to change anything, whereas my IFA was able to make changes for me.

There is no 'national pension fund' which requires members to use a financial adviser. I think you're probably referring to a pension provider, which is a different thing - but possibly doesn't matter in terms of trying to give you some practical help on how to move forward.

If the only reason for having an IFA was to interact with your current fund, then as others have suggested, it would make sense to transfer to one where you can handle the transactions yourself. Is that something your old adviser might be able to handle, or is he no longer regulated?

simprove

@dunstonh

"You haven't mentioned which platform it is other than its a big name. Most of the big names are profitable and stable. So, risk is tiny. Unit linked investments are ringfenced from the provider. Its not like banks where the bank has your money. Investment platforms are little more than administrators."

As I said, I was trying to avoid naming names, but clearly that caused confusion. To be crystal clear, the "national name" I referred to is my current pension provider, Scottish Widows. It's my new Financial Advisor that is offering a wrapper product on a different investment platform. That platform is Transact.

Looking at the offer paperwork my new advisor refers to his position as being an Independent Financial Planner.

___________________________

Posting restrictions may be necessary for the inexperienced, but not permitting editing of posts to correct errors is very frustrating. This is the most awkward forum to use that I have ever come across. Hopefully things will improve when I've made enough posts.

dunstonh

As I said, I was trying to avoid naming names, but clearly that caused confusion. To be crystal clear, the "national name" I referred to is my current pension provider, Scottish Widows. It's my new Financial Advisor that is offering a wrapper product on a different investment platform. That platform is Transact.

The old Scottish Widows products are very poor by todays standards but back in the day they used to be good. A few years back, SW bought the Embark platform (which was ex Zurich before that) and they have made a lot of improvements to it but its not good value for money.

Transact is one of the best platforms from a functionality point of view and has good terms for larger investors but not for smaller. Transact is an IFA platform. It isn't an in-house platform.

Looking at the offer paperwork my new advisor refers to his position as being an Independent Financial Planner.

There is no restriction on them dealing with SW products then. So, that makes it a commercial decision.

The older SW products from pre 2013 were commission-based. A group personal pension would often have little or no adviser remuneration. So, maybe the old pensions paid little or nothing? Do you know what the fee was on the SW pension? (or was it a commission).

simprove

@dunstonh

Transact is the platform that my new IFA use for their wrapper product. My investment would be with Transact with the IFA controlling it.

SW wasn't the fund used by the group pension scheme. My IFA advised me to transfer my fund to SW when I started my own company. Charges have always been a percentage, overall 0.7%, including 0.3% for the advisor.

I find it hard to regard the advice on the new offer as independent when their own wrapper product, on Transact, is the only thing they offer. What exactly is the difference between an IFA and an IFP. I tried googling "Independent Financial Planner -Advisor" and it only returned results for IFAs.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81928391#Comment_81928391

Posting restrictions may be necessary for the inexperienced, but not permitting editing of posts to correct errors is very frustrating. This is the most awkward forum to use that I have ever come across. Hopefully things will improve when I've made enough posts.

I would not complain too much. You are getting good ( and free ) feedback, despite the shortcomings of the forum itself.