IFA for pension advice and fee - outcome

felinefancy

Evening…

We consulted three IFAs to help us sort out our pensions and prepare for retirement at 65 (I'm 60, he's 63). The first never came back to us, the second wanted to push high risk products, the third was nice and easy and we've had our second meeting with that one tonight. Presentation and outcome was pleasing - we will be able to retire at 65 with a moderate income for simple living and annual foreign travel, which is all that we need.

So to my question - the fee chargeable for him to put all our pensions (7 in total) into one company is going to cost us approximately £5500. And then if we wanted ongoing advice, that would be an extra 0.75%. Whilst I'm ok to pay £5.5k, if it's as simple as just contacting the new provider with our requirements for pension consolidation, is there any reason why can't I do that myself, and save five grand? (We're not going to have ongoing engagement.)

Is it that simple or am I missing something?

UrbanAchiever

I moved one pension to another a few years ago and am just in the process of doing it again with another. Very simple and certainly not something I'd pay anyone to do for me. Of course if you are moving a DB to a DC you will have to get an IFA to advise you.

xylophone

You and your partner have only DC pensions with no safeguarded benefits?

LHW99

Assuming all your pensions are DC, then yes, you can either choose one and move the others into it, or open a new personal pension (each?) and put them there. You would ask the chosen / new provider to make the transfer.

There are a few things to think about first:

Do any of these pensions have safeguarded benefits? If so and they are worth more than £30k you would need advice to transfer them.

How do you want to access the pensions when you retire? Older pensions may not offer all the legal ways to do so, so may not be a good choice to consolidate into.

Others here will have more input.

Have you thought of having a free consultation with pensionwise (guidance, not advice)? https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

dunstonh

It's strange that one was pushing high-risk products, given that IFAs aren't paid to push products. That is more the behaviour of an FA than an IFA.

Whilst I'm ok to pay £5.5k, if it's as simple as just contacting the new provider with our requirements for pension consolidation, is there any reason why can't I do that myself, and save five grand?

Yes, you can do that.

Is it that simple or am I missing something?

There were plenty of things to miss. Choosing the provider, choosing the investments, checking the existing plans, and ensuring they have no safeguarded benefits. Choosing the functionality you're after. Not all pensions offer all options.

If you are not taking ongoing servicing, then the advisor would not normally recommend the same investments that they would use for ongoing servicing. So you're more likely to be in off-the-shelf options anyway. Plus, if you were going transactional rather than ongoing servicing, the provider would likely be different as well. Some providers are set up for the advisor to do everything. Others will accept instructions direct from clients fairly easily.

The key thing to DIY is that if you DIY well, then you can save money. If you DIY badly, it can be a costly mistake.

zagfles

https://forums.moneysavingexpert.com/discussion/comment/82027999#Comment_82027999

Yes well worth talking to pensionwise, it's free and they can guide you through the options and help you decide whether you need advice or not. Most people with normal circumstances probably don't, most pension providers will offer "drawdown investment pathways", which are 4 or 5 off the shelf portfolios depending whether you want to drawdown now, in the future, no plans yet, want an annuity in the future etc.

Marcon

https://forums.moneysavingexpert.com/discussion/comment/82027990#Comment_82027990

Advice is only mandatory if the DB scheme has a transfer value of at least £30k.

Albermarle

OP -

As already said you can most likely DIY the pension consolidation and save the IFA fee. However be aware that:

1. You will have to choose how to invest the money when it arrives at your new or existing provider. Nowadays there are off the shelf type products that make it easier, but you still have to choose in the end.
2. Drawing down from a pension is a bit more complicated than adding to it, as you want to optimise the amount you take out each year. Obviously if you take too much the money could run out too quick, and if you take too little you are getting less income than you could. Plus you have to get your head around the taxable/tax free parts and the ways of dealing with that.

If I had one bit of advice I would say if you are going to DIY, do some more reading and research first, and part of that should be regularly reading through this forum which can be a very good resource.

Clive_Woody

It is really easy to consolidate pensions into a single pot (assuming DC pensions) and takes minimal time. SO long as you are comfortable choosing which funds you want to invest in then I would definitely save yourself £5k.

HedgehogRulez

Agree with all of the above - IFAs in this instance are a complete waste of money

😉

letthemeatcake

Similar to you, advice would cost around £4000 on £185000, plus 2 lots of ongoing fees 2% in total, so I decided to do more reading about pensions. 18 months on I have a much clearer picture. I don't pretend to be an expert, I just felt that the lump sum would be better invested on partners behalf as he'd already lost a chunk in a divorce.