IFA charges

[jenny1966]

Hi All,

I'm new here so please be gentle.

I am about to sign up with an IFA for managing my pension.

They will charge me 1% of the fund value.
Is this the norm?
What sort of charges do other people pay?

Thank you for reading
Jenny

If that is the annual trail, far far far too much.

0.5% max advice charge, trail to pay for advice.
0.25% provider/platform
0.1-0.8% to the fund manager

Charges eat your pension. What you spend can't grow!

I'm a Chartered Independent Financial Adviser, you are being mugged.

Please don't tell me it's St James's Place.

Go on unbiased or vouched for and speak to 3 advisers.

Unlike other services you don't necessarily get what you pay for, you keep what you don't pay for.

There are companies out there (vouched for) which will suggest you move your pension to a different provider and take 4% initial advice fee and then 1% per year for just an annual review.
It's definitely worth shopping around.

Unless they can show a saving INCLUDING the fee, I'd be asking why it's moving. However, there can be good reasons now pension freedoms are her.

Less than £100k 3% is common, over that then negotiate. I would expect it down to 1% by the time you hit 300k, if not before. Frankly the ongoing relationship is where value lies so negotiate hard.

Vouched for is to get names, not guarantee to deal with them.

Anything from 0.5% - 1% per annum is normal. Find out exactly what you'll get for that 1%!

It might be normal but 1% is too much. If you spend it, it can't grow.

You can get all sorts of bells and whistles (and get blinded by the gloss), but you can't get a guarantee of returns.

What you can guarantee is that high charges impact on a fund more than anything.

Hi All,

Thank you for your replies.

My fund is currently valued at just under £100k.

For the 1% my IFA would meet with me once a year to discuss my portfolio but they would also monitor my portfolio throughout the year and suggest any changes should it be needed.

If 1% is the going rate then so be it but it just seemed a little high to me.

Without sitting through endless meetings with other IFAs I'm struggling to find what the norm is.

I'm an adviser and I work on a tiered percentage basis but with a minimum charge. For on-going advice it would be between 0.5% and 1% depending on the level of service required, complexity of affairs and value of assets under management. In other words, how many hours I think that I am going to need to spend on the review and the level of risk to me of getting something wrong and affecting my Professional Indemnity insurance. I think from what you've described I'd expect to be paying more like 0.75%.

i would suggest 0.5% and have a meeting every 2,years. ...

Bollocks he's monitoring it, if that happens I'll eat my hat. Words are cheap, those charges aren't!

If he suggests changes, are they included in that 1%? Or is that another charge? I'm sceptical. That's expensive. 0.75% I'd accept, 1%. Nope.

Don't do it.

Thankyou again for all your advice.

I've been talking to a few colleagues and friends and was surprised how many managed their own pensions.

Is this something you would recommend?

Any advice on doing this would be appreciated

As with any professional service, the extent to which you might manage it yourself will depend on your confidence to do so and to accept that if things go wrong or don't turn out as hoped then you take full responsibility.

Would I recommend doing it yourself? Er, no, you'll most probably cost yourself as much in lost opportunities as you'd spend on an expensive adviser.

I'd recommend finding a more competitive, but well qualified adviser. Speak to a few.

I deal with financial advisors through my job. Some are great. Some are shit. One in particular I see his name and I know what his clients will have, the funds that pay the highest commission. The FCA tried to stop that sort of behaviour with an overhaul of how advisers are paid but there are loopholes for asshole greedy bastards