Do we need a ifa?

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daisyrose
daisyrose Posts: 142 Forumite
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in Pensions, annuities & retirement planning
What is the best way to start taking an income from a sipp? We have a fa and I have been searching for a ifa but dont know what to look out for and cant get any recommendations from anyone we know
From an earlier post I have found that all fees together are too high so we need to make changes
I'm interested to know how others take their income and what is the most cost effective way? Do we need a ifa?
Thanks in advance.
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  • dunstonh
    dunstonh Posts: 116,374 Forumite
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    Do we need a ifa?

    Its like any job. You can DIY or use a professional. DIY well and it can be cost effective. DIY badly and it can be a costly error.
    I'm interested to know how others take their income

    Are you referring to the drawdown strategies or the investment strategies?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • beamyup
    beamyup Posts: 150 Forumite
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    So long as you are not overly optimistic on your drawdown then DIY should not be a problem.

    In my opinion costs are very important. DIY is a very good way to reduce costs.

    If you can find a good IFA they can probably also reduce some of your costs but will add a huge chunk of costs by way of their own fees.

    You can search for a good value and easy to use SIPP drawdown provider that suits you from the big names. the charges should be low. Personally, I plan to use AJBELL. this may help. https://www.which.co.uk/money/pensions-and-retirement/options-for-cashing-in-your-pensions/income-drawdown/compare-pension-drawdown-plans-and-charges-ax1628r13rdk

    You can then drawdown simply and efficiently in whatever way you prefer.

    If you want to provide a lot more detail about your situation then more detailed suggestions will be offered.
  • crv1963
    crv1963 Posts: 1,372 Forumite
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    I think a lot depends on your confidence. I feel confident that I could manage my own drawdown process but I also know that Mrs CRV would be horrified at having to do this.

    So for us an IFA to help manage the process will when the time comes be worth the cost for the peace of mind.

    As my wife says to me "Just because you have a set of spanners and know what they are for- it doesn't make you a mechanic!".
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
  • dunstonh
    dunstonh Posts: 116,374 Forumite
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    In my opinion costs are very important. DIY is a very good way to reduce costs.

    DIY can also increase your costs. It isnt whether you DIY or not that saves you money. It is how you DIY. Two of HL's top 10 selling funds are their own brand very expensive funds. This means a high proportion of their DIY investors are paying more than they would by using an IFA.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • sandsy
    sandsy Posts: 1,720 Forumite
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    Don't worry about recommendations. If someone likes their adviser they'll tell you they're good, even if they don't know if they are.

    Try: https://adviserbook.co.uk/

    Make sure you tick the box 'confirmed independent'.

    You should talk to 2 or 3 before you commit to one. See if you like them and if you would feel comfortable working with them. Do they seem to be just a salesman or someone who is interested in helping you achieve the best you can in a way which suits you? Ask about advice charges and what service you actually receive for the money you would pay - not only upfront but ongoing too. Trust your instinct.
  • daisyrose
    daisyrose Posts: 142 Forumite
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    Thank you all for your comments I have found them interesting and you have high lighted some things that I haven't thought of. I'm not at all confident about diy I dont know enough about how it all works and fully agree with Mrs CRV. With the strategies are there any alternatives to drawdown and annuities? Would you stick with the current sipp provider or shop around before drawdown?
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    daisyrose wrote: »
    Thank you all for your comments I have found them interesting and you have high lighted some things that I haven't thought of. I'm not at all confident about diy I dont know enough about how it all works and fully agree with Mrs CRV. With the strategies are there any alternatives to drawdown and annuities? Would you stick with the current sipp provider or shop around before drawdown?

    Well that would depend on the current SIPP provider about which we know nothing.
    No there aren't really alternatives to drawdown or annuity but there are numerous drawdown strategies depending upon your other financial circumstances and there are also different types of annuities and it doesn't have to be one or the other you can mix and match or start with drawdown and then move to annuity (becaus annuities tends to be better value as you get older). Health also comes into it.
  • OldMusicGuy
    OldMusicGuy Posts: 1,758 Forumite
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    edited 17 April 2019 at 9:10AM
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    It's not that complicated to DIY. Before paying a lot of money to someone else to do it for you, I suggest you do a bit of reading first. This book is often recommended on here: DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning, by John Edwards. Well worth a read before you decide which way to go.

    I'll disagree with Mrs CRV somewhat. Just because a guy with some spanners calls himself a mechanic, it doesn't always mean he's any good, nor does it mean he won't overcharge you for poor or indifferent service. I have encountered some garages and mechanics over the years that have not been up to the job. Similarly I know of a fully accredited IFA that defrauded his clients (of course, not all mechanics and IFAs are like this, but some are).
  • dunstonh
    dunstonh Posts: 116,374 Forumite
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    Anyone that claims perfection in any industry or profession is deluded. Every area has bad apples. IFAs are responsible for millions of pension transactions a year. Yet the latest FOS complaint stats show that just 1678 complaints were made against IFAs in 2017/18. 271 of them for stuff over 15 years ago (notable as there were big changes in the period since). And just 451 were on pensions. 365 of the overall number were not to do with advice but administration. Complaints against IFAs have been falling nearly every year.

    The main areas of concern are factory line services (firms set up to do a transaction on a quick turnover basis), unregulated investments (again, a small number and mostly used by cold callers and again, factory line type services) and firms that phoenix. i.e. set up under one name, trade badly for a couple of years, close the limited company and then set up a new company repeating the stuff before but dumping liability on the FSCS each time.

    A localised firm with a history that relies on local reputation within the area is usually the safest method.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • crv1963
    crv1963 Posts: 1,372 Forumite
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    OldMusicGuy wrote: »
    It's not that complicated to DIY. Before paying a lot of money to someone else to do it for you, I suggest you do a bit of reading first. This book is often recommended on here: DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning, by John Edwards. Well worth a read before you decide which way to go.

    I'll disagree with Mrs CRV somewhat.

    I agree OMG, I feel I could do this reasonably but my point was that for Mrs CRV doing it would be stressful and cause sleepless nights. Therefore for us as a couple the costs of an IFA to give advice would be worth it.

    It is a case of each doing what they are most comfortable with.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
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