Financial Advisors. Do they work for me or for themselves?

[Greeklover]

Sorry for the odd question but i‘m really not sure.

We have a local independent financial advisor that we were recommended to see. A bunch of people from work were sorting their pensions out and were using this guy.

I went to see him and he advised me to move part of my pension that wasn’t in the final salary scheme to another plan so that’s what I did. He also drew up a detailed plan for both my husband and myself to show how it could be possible to retire at 60 by drawing down amounts etc. I’m absolutely clueless about pensions so was happy to take the advice.

Due to covid this pension plan hasn’t performed at all (expected). He’s been in touch again recently to suggest I look at a different plan that would offer better gains - again I have no idea whether this is the right thing to do.

it started to make me question his motivation - I’m pretty sure he takes a tiny cut from my pensions to manage this for me so basically my question is, do financial advisors simply push products to increase their cut or are they required to make sure that they only offer the best deal and look out for the client.

Im not sure whether I should place all my trust in him and follow his advice on everything or get second opinions. I’m absolutely clueless with pensions so really need someone to push me in the right direction. I don’t want to use him if he will push me to decisions that only benefit him.

Bit of both.

Are you actually moving your pension to a different provider or just changing the funds it's invested in?

They always work for you but they obviously have to make money. You should know how much money you are paying him for any service. If you don't understand how it benefits you then you need to ask him to explain, that's the whole point of it really.

Could you not have made additional voluntary contributions into your final salary scheme?

Financial advisors will take a cut of your defined contribution pension. Ask them how much?

An IFA should have done a full fact find and looked at all areas of your finances, not just one.

They have to recommend products that are the right risk level for you. They have to tell you about all their fees - in writing.

They can't guarantee that funds will perform - all they can do on is previous performance.

If you're not happy, talk to your IFA again or ask friends for recommendations for another one.

“I’m pretty sure he takes a tiny cut from my pensions to manage this for me”

Pretty sure? 😳
If you don’t know, because he didn’t tell you and he didn’t put it in writing as he is legally obliged to do so, drop him and make a complaint.
If you don’t know because you didn’t bother to understand it - then don’t go any further with IFA advice until you’re prepared to give your decisions proper attention!
You should know, and you should know how much.

You need to find out what fees he's taking because I very much doubt he's giving advice for free. Go through your paperwork, he should have given you information on his fees. Failing that, ask him.

Check his details on the FCA website and ensure he has the correct qualifications to give you advice. So you're looking for a number 4 on his qualifications, this means he's qualified. If he's giving you advice on a defined benefit pension you're looking for an 11 on his qualifications.

Go on the the Scam Smart website and you can possibly get help from pension wise, you can also check the pensions advisory website too, also the citizens advice bureau.

Him saying you can retire at 60 is odd because investments go up and down, so there's no guarantee of that.