Independent Financial Advisor - expectations

Dylenne · 21 April 2018 at 11:27AM

I have multiple pensions from previous employer schemes into which I am not allowed to contribute. So I decided to seek an IFA for advice on whether to consolidate them and/or invest in another product into which I can make regular contributions.

I found an IFA and felt comfortable after the initial exploratory meeting so hired them to conduct a review of my portfolio and recommend a course of action.

I'm very disappointed with their report. It sets out the facts and figures of my current pensions (which I already knew) and simply recommends that I consolidate my pensions into the IFA's own SIPP which is administered by a company I've never heard of (Liberty). The report doesn't offer me a choice of options to consider and, as far as I can see, I'd be increasing my annual charges from around £600 a year to £2,500.

Notwithstanding the potential for this SIPP to perform better than my existing pensions, which I cannot predict, I've paid for this advice yet have nothing to indicate whether to accept it. My instinct says no.

If anyone here has sought similar advice I'd be grateful to know how it went for you and whether you were given more choices and information to consider than I have been.

Many thanks

xylophone · 21 April 2018 at 12:29PM

Are you able to manage your own investments?

Had you considered transferring to a DIY platform?

http://monevator.com/compare-uk-cheapest-online-brokers/

http://monevator.com/index-investing/

http://monevator.com/low-cost-index-trackers/

https://www.hl.co.uk/free-guides/guide-to-investing-in-funds?clickid=1G6SokwgTQ%3Am3v7WQVR2RyslUkj3wNy9NRKtxA0&iradid=82616&theSource=AFM2M&utm_campaign=AFM2M_IMPR1&ir=1

Dylenne · 21 April 2018 at 12:52PM

Thanks xylophone. I don't feel I have the expertise or time to manage my own investments. I'd like to put them into a scheme, similar to the ones I've had during employment, where they will be managed by an appropriate person and I can simply keep an eye on them.

Was I naïve in expecting the IFA to talk through the different options?

Brynsam · 21 April 2018 at 1:10PM

Dylenne wrote: »

Thanks xylophone. I don't feel I have the expertise or time to manage my own investments. I'd like to put them into a scheme, similar to the ones I've had during employment, where they will be managed by an appropriate person and I can simply keep an eye on them.

Was I naïve in expecting the IFA to talk through the different options?

Very much depends on the instructions you gave. Not all clients want options and get very grumpy if their adviser doesn't give them a clear 'do this'. If you look again at your own post, you say: 'I decided to seek an IFA for advice on whether to consolidate them and/or invest in another product into which I can make regular contributions. I found an IFA and felt comfortable after the initial exploratory meeting so hired them to conduct a review of my portfolio and recommend a course of action.'

Isn't that exactly what the IFA has done?

Dox · 21 April 2018 at 1:35PM

Dylenne wrote: »

I'm very disappointed with their report. It sets out the facts and figures of my current pensions (which I already knew) and simply recommends that I consolidate my pensions into the IFA's own SIPP which is administered by a company I've never heard of (Liberty). The report doesn't offer me a choice of options to consider and, as far as I can see, I'd be increasing my annual charges from around £600 a year to £2,500.

Notwithstanding the potential for this SIPP to perform better than my existing pensions, which I cannot predict, I've paid for this advice yet have nothing to indicate whether to accept it. My instinct says no.

The report sets out the facts and figures to ensure there is no misunderstanding now or in the future about the basis on which the report was prepared. You wouldn't be the first client to overlook one or more of their old pensions.

The fact you haven't heard of Liberty doesn't mean it is not a suitable investment vehicle for you and the IFA should explain why this has been recommended.

You didn't ask for a choice of options; you asked the IFA to recommend a course of action.

'I've paid for this advice yet have nothing to indicate whether to accept it.' Yes you have - the IFA's advice.

Dylenne · 21 April 2018 at 1:36PM

I see your point and I apologise for over-simplifying my post. I asked the IFA to review my existing portfolio, including the current fund choices, and to advise whether:

they were performing satisfactorily, in his opinion, and should be left as is and open a new pension for future contributions
I should retain the same pensions but modify my investment choices (I had made some ethical fund choices in the past, which he advised against during our first conversation)
I should consolidate all or some of my pensions into another vehicle and, if so, to advise on options

What I didn't ask him to do was present me with a single option. His recommendation might be sound but it comes without a strong rationale and I'm uncomfortable that the pension he recommends is managed by the company for which he works.

So in the absence of substantiating detail and comparison I don't feel it's an informed decision. I didn't get what I thought I was paying for. Before I say that I'm not satisfied with the work I wanted to check whether my expectations were unreasonable, and see what others had received from similar services.

Thanks

Dox · 21 April 2018 at 1:48PM

Dylenne wrote: »

What I didn't ask him to do was present me with a single option. His recommendation might be sound but it comes without a strong rationale and I'm uncomfortable that the pension he recommends is managed by the company for which he works.

What does your contract with the IFA actually say he was going to do?

Go back to him and ask for a 'strong rationale' for recommending a SIPP managed by the company he works for. It's a wholly reasonable question.

PeacefulWaters · 21 April 2018 at 1:51PM

I'm uncomfortable that the pension he recommends is managed by the company for which he works

What makes you think he's an IFA?

xylophone · 21 April 2018 at 1:52PM

https://www.standardlife.co.uk/c1/accounts-and-services/pensions.page

I wonder would the Standard Life "Easy Option" Personal Pension suit you?

I'd like to put them into a scheme, similar to the ones I've had during employment, where they will be managed by an appropriate person and I can simply keep an eye on them.

Dylenne · 21 April 2018 at 2:09PM

Good question. I checked they are FCA registered, unbiased.co.uk who appear to be satisfied that they are an IFA and I checked what they say about themselves on their website. Is there something else I should have done?

Dylenne · 21 April 2018 at 2:26PM

Thanks xylophone. I've taken a look and I'd be more comfortable with that. The Standard Life Easy Option Pension seems to have a low monthly contributions threshold, however, and as I'm 50 I'd like to make larger contributions.
If it's not too silly a question, does this kind of pension have a generic name? I'd like to look up others of a similar nature that might allow higher contributions.
Thanks

Independent Financial Advisor - expectations

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