is 800 too much for an IFA?

[Samnella]

DH and i want to speak to an IFA about pensions and tax. Namely advice on how to save for a pension now dh is self employed and whether it is tax efficient for me to work for him or stay in my job. I understand you pay fees now and have been quoted 800 by someone local. I got their details from unbiased and They have some good reviews. Just seems alot but this is unknown for us.

Absoutely not !
ant remember how but from a link on mumsnet a few years ago we asked much the same question.
we went onto a website which gave the contact details of IFA in our area and we were ale to print off a voucher for one free consultation .
e came to our house and went through everything.
Turned out we had a fantastic pension already both of us and he reassured us that we don't need to invest any further !
Do some more research and you won need to part with 800 pounds x

You don't pay fees up front.

I believe you do pay fees upfront as they dont get paid commission any more. I have asked for a quote from another IFA so will compare. Its a minefield.

An IFA will be able to give you pension advice, but probably not as good at tax. A good tax accountant will give you better advice for that.
You should look at what diploma papers the particular IFA has and whether they specialise in the area you need.

Thank you Lonecat. I have the other one calling me tomorrow so will ask. The tax advice is really only whether it makes more sense for me to work for DH or carry on in my job. We could probably look that up ourselves.

I would speak to a couple of IFA's and get a feel for how you get on with them. This is a relationship that should be ongoing (you CANNOT invest in a pension and then not review it, preferably on an annual basis) and you should feel comfortable with them and their style. Before any money changes hands I would expect an initial meeting at which the manner in which you pay for their services is discussed - fixed fee, hourly rate, provider fee.

To be honest to implement a new pension and review your finances I would be charging closer to £1k, but if you decided not to go ahead then the bill would be reduced, but it would vary depending on how much work we had undertaken (£250 is going to be the minimum once you have instructed us to start).

You don't pay fees upfront, but you will sign a contract and it will be quite clear about the costs you are agreeing to. Very much like using an accountant or a lawyer.

As for tax advice a suitably qualified tax accountant is what you need. I have passed tax exams, but I wouldn't give high level tax advice (and it is not regulated so you are not protected). I do know enough about tax to refer people to a tax accountant and I would expect any IFA worth their salt to do the same. In the same manner accountants shouldn't give investment advice, it's a different game!

does your DH have a job for you? ie is it something that needs doing anyway for which he would need to take on someone external if you don't do it

If he does then things to consider would be;
what are the prospects,
how does it compare to your current job
would it be secure income
would you be happier doing it that your current job etc.

If you are just thinking of him paying you for something that doesn't really need doing then that isn't worthwhile - you would be cutting the overall income available to your family as you would lose your external income.

Hi ChasingSquirrels - To answer your questions:

If he does then things to consider would be;
what are the prospects,- None. It would be an admin type job taking up a few hours a week (time sheets/filling out forms to send to his accountant/expense recording) but it would allow me to spend more time at home (children 5 and 7 and I work FT so may help balance things a bit more)
how does it compare to your current job (not sure yet)
would it be secure income (only whilst he has work)
would you be happier doing it that your current job etc. Probably a bit of both. I have just been offered a promotion so need to balance it all out.

Yes we would lose income but it would also reduce DHs tax bill which would balance it out along with less work related expenses for me. I am not hugely keen for various reasons (I have a bit of a thing about wanting DD see me work, worry about putting all our eggs in one basket and don't want to regret not taking the promotion for a start but also struggle working FT and as a family it may be better). I want to see the figures on the table before I can decide.

Notmadeofrib Thank you for that. You say the fees are not paid upfront but I have checked the quote and it gives me an option to pay after or upfront - the latter being slightly less as well as a 25% reduction for over the phone consultation. Should any of this ring alarm bells? I got the number from Unbiased and filtered on those with testimonials, checked the website and see they have quite a few awards. They are a small husband and wife team as well which appealed to me.

I don't think you need to talk to an accountant or an IFA about that - really it is more of a lifestyle choice isn't it?

So current full time work v SAHM with small amount of admin (which in reality someone - you? - is already doing at the moment?).

The things that you need to consider in this are;

• affordability - loss of your income, reduction in costs related to you doing your job, tax saving (depending on his profit level he should also be considering whether incorporation is an option). If you can't afford it then it probably isn't a great idea so isn't worth considering the other point :)

• impact on life - how you will feel, how fulfilled you are by your job v what the impact on your family life will be of you not working full time etc etc. This is a judgement call based on you and your family. You would probably get much more "value" by talking it through with a few friends tbh!

Well as you can pay out of the pension, I would be suggesting that myself (you get tax back from the pension payments you make so the tax you save actually pays towards the fee). It delays the payment to the IFA (providers don't fall over themselves to pay), but it is the smart way to do things.

Paying up front I suppose is more to do with their cashflow and not in itself an issue, except your right to cancel. Have you actually spoken to them? I wouldn't commit until you've spoken to them.

I know what you mean. The main advice we need from an IFA is pensions so the tax thing is a bit of a distraction from the main point. The admin is being done by DH at the moment and doesn't justify a salary so would be a way of using my tax allowance whilst reducing DHs tax bill as well as balancing things for the children. If it made financial sense I would probably do it as I am worn out but ask me another day and I will have a different answer.

Notmadeofrib- Yes I have had an initial consultation. I liked the sound of him and he sent me an email with the quote. Do you mind explaining what you mean to pay out of the pension? You say the providers pay but I though they weren't allowed to. I am confused now.

oh yes - when I said you don't need an IFA or an accountant I meant for the job question, not the pension - sorry.

Hi Samnella

Commission is decided between the IFA and provider and is no longer allowed. The provider can pay an agreed fee to the IFA.... splitting hairs really, BUT it means you are in control of what is paid (rather than what could at times appear like a bit of a sneaky backhander if IFA's weren't very very clear).

Thanks Notmadeofrib. I understand now, but if I say I am going to pay after surely they will only go for the products that will guarantee them the fee they want. Whereas upfront fees paid by me would prevent this?

No the fee is agreed by you and the IFA, the fact it is paid by the provider doesn't change the amount, the provider has no say and the IFA can't be influenced because you and they decide it. The provider is instructed to the amount, they don't offer an amount - that would be commission.