Question on recouping IFA cost outlay

[MuchoGoustoChezBurger]

Hi, name changed for this. Can anyone help me decide if outlaying a £1k flat fee on an IFA is worth it for advice on a set of pension pots worth about £150k with circa 15/20 years remaining of working life. We are still paying down a reasonable sized mortgage but should be in a much better position in 5 years time.

I am thinking that it may be better to wait the 5 years and consult with an IFA then once we potentially have more funds we could channel into pensions etc?

Any thoughts useful as I have not found an indication on ROI for this (in the appreciation there clearly are benefits but how much?).

Many thanks in advance for any advice.

Bumping for traffic, can anyone help at all?

I think it would depend on how good the IFA's advice is. Some might make you a lot of money and others not so much. It's hard to predict and Impossible to do an ROI. If you have a personal recommendation I think it may well be worth the money.
Alternatively you could approach a fund like St James Place who will give you advice as well as invest and manage your funds. They do not charge upfront but have an annual charge (around 1.75 to 2% of your pot). Some may say that's too steep.
You can also self invest in SIPP instead. Ultimately it boils down to how much do you know, how much advice you need and how good the advisor is.

That seems very little - is it just a review? Or are you trying to consolidate? Ask for details of all charges: initial advice fee, fund charges, platform fees, ongoing adviser fees.

Thanks for your responses, yes it was a personal recommendation, and fees wise it’s the initial outlay for review of existing circs only, there would be a further £1k for an onwards designing of a solution and then %fees on implementing transfers etc.

I don’t dispute that good advice will help, more trying to work out if my timings out I suppose.

Waste of money for the pot and the length of investment personally. Can probably self manage with internet resources and save yourself thousands(tens of thousands if you choose the St James Place option)

Don’t go with St Jame Plce, they don’t have a good rep at all. 1.5 to 2% is considered a high charge.

If there’s one way to over pay, it’s to go to SJP! I’m surprised it’s even mentioned on here 🤣

I’m not sure what the £1000 is for. You say it’s for advice then a later post said it’s for a review but you’d need to pay another £1000 for “designing a solution”. I’d avoid an IFA using a wanky phrase like that! But back to the point… is that the setting up bit, arranging the transfers? Or is that the actual advice?

What are your returns like currently (well, up until Feb 23rd 🙈) and what’s your preferred risk level? If you want fairly low risk and your current funds are outperforming the FTSE100 I’d stay as you are.

I saw an IFA a few years back who was extensively and highly reviewed on Trustpilot, as I didn’t have a personal recommendation. He told nothing I didn’t already know in review. He set up new pension fund provider for me. That’s what I’d asked him to look at - I was invested already but I’d done so just by randomly picking a mix of 5 Aviva funds based on not all being same risk profile or same geography. But for my contributions since then (5 years now) I put 2/3 into his recommendation and 2/3 into VLS60 tracker fund. Performance has been the same 🤷🏻‍♀️ And that cost me £2K.

I think IFAs are best for those who are clueless, too lazy to research, or those looking for high risk funds.

Thanks for the additional responses, it’s given me food for thought! I can’t shake the feeling that it’s not for me at this point in time. Thanks again

A professional wealth manager with fair pricing would probably charge you 1% of assets per year, so £1500 per year for £150k in assets.

If you have some discretion over how the £150k in existing pensions get invested, and if you also have some discretionary cash flows for which you can choose among faster mortgage repayment, increased pension contributions, investment into an ISA, etc. but cannot do all of the above, then unless you are very familiar with the relevant tax and liquidity rules around these different options and how they apply to someone in your circumstances, and feel confident in being able to choose wisely among them, I would argue that £1k one-off with a good IFA could be money well spent.

Sorry, I should also add that I agree with the numerous PPs who said that St. James Place is too expensive. Plus, their focus is likely to be which of their funds to put you into, whereas a truly independent advisor would equally weigh options such as mortgage paydown or extra contributions to your existing pension that would not add anything to an asset pot against which they get to charge fees.
If you can share anything about the affiliation of the IFA you are considering, by private message if you prefer, then I would be happy to opine as to whether that affiliation produces a good alignment with your interests, even without knowing anything about the specific individual.