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    • curtainmaker12
    • By curtainmaker12 5th Apr 18, 11:24 PM
    • 2Posts
    • 0Thanks
    IFA Charges. What can I expect for his 1% fee?
    • #1
    • 5th Apr 18, 11:24 PM
    IFA Charges. What can I expect for his 1% fee? 5th Apr 18 at 11:24 PM
    In 2015 an IFA advised me to opt out of my LG pension as Id left that job and hes managed my pension investment since then. However, it's been in the same Investment Fund so he doesn't seem to do a lot for his 1%. Am I being unkind? What sort of on-going contact/advice should I reasonably expect? Thanks.
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    • Brynsam
    • By Brynsam 5th Apr 18, 11:49 PM
    • 1,607 Posts
    • 1,164 Thanks
    • #2
    • 5th Apr 18, 11:49 PM
    • #2
    • 5th Apr 18, 11:49 PM
    What do you mean by 'opt out'? It has a specific meaning: leaving a pension scheme while still being in the employment related to that scheme. Do you mean 'transfer out' - and if so, what was the rationale for doing so? Simply leaving LG employment doesn't automatically make it a good idea.

    As to being in the same fund - what instructions did you give him about your attitude to risk? Is the fund appropriate for your expectations? If so, if you've only been in it since 2015 and the fund is doing OK in the context of similar options, there would be no reason to suggest a move. Maybe the best idea is to talk to him, rather than asking strangers to guess - that's the only way you will find out.
    • dunstonh
    • By dunstonh 6th Apr 18, 12:07 AM
    • 94,587 Posts
    • 62,571 Thanks
    • #3
    • 6th Apr 18, 12:07 AM
    • #3
    • 6th Apr 18, 12:07 AM
    What sort of on-going contact/advice should I reasonably expect?
    What does he say when you ask that? (or read your contract and see that they says. Its been a requirement since 2013 to state what service is provided on the fee agreement you sign).

    Is he actually getting 1% or is that the annual product and fund charges?

    However, it's been in the same Investment Fund so he doesn't seem to do a lot for his 1%
    Prior to 2018, no change reviews required no written report. As of 3rd Jan 2018 onwards, reports must be issued "at least annually". If there is no justification to change the fund then its good its not being moved.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • curtainmaker12
    • By curtainmaker12 9th Apr 18, 6:48 PM
    • 2 Posts
    • 0 Thanks
    • #4
    • 9th Apr 18, 6:48 PM
    • #4
    • 9th Apr 18, 6:48 PM
    Thanks so much for the replies.
    I transferred out on the IFA's advice as he advised that he could get me a better return. Completing the risk questionnaire put me at "balanced" and my money is in the GS Wealthbuilder and 7IM AAP Mod Cautious.
    The IFA terms are a review meeting a year, an annual assessment of goals etc. He feels my pension will be OK but as the forecast is for about 25% of my current income can I share his confidence? I!!!8217;m 55.
    I'm not in a position to contribute for the foreseeable future so I'm thinking it would be better to invest the IFA fees than pay them. The fees are 1% plus platform and admin charges. If I manage my own SIPP, is it possible to transfer the money already in the GS and 7IM Funds to my SIPP without paying fresh start up fees? Thanks
    • Malthusian
    • By Malthusian 10th Apr 18, 10:59 AM
    • 4,669 Posts
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    • #5
    • 10th Apr 18, 10:59 AM
    • #5
    • 10th Apr 18, 10:59 AM
    I'm not in the habit of second-guessing professionals who know more about your circumstances than I do, but 1% per annum is a rip-off to be dumped in two risk-rated multi-asset funds.

    There are other things the IFA might be doing for his 1% per annum, but when you take 1% per annum, one of your jobs is to make sure the client knows you're doing it. In other words, if you don't think you're getting value for your 1% per annum then you're not.

    The 7IM Moderately Cautious fund has total costs of 1.3%pa; the GS fund is slightly lower at 1%pa. Add platform costs and the IFA's 1%, and you're looking at total charges the wrong side of 2.5% per annum for part of the portfolio (I don't know the split).

    No adviser on the planet can guarantee a better return. Unless your old pension had a very low rate of growth, it is unlikely that a very expensive portfolio heavily invested in fixed interest is going to outperform anything in particular.

    There are plenty of DIY SIPPs which you would be able to transfer to without paying an initial charge, although check that there wouldn't be any charges for transferring out of the original.
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