Delay from financial advisor

[chimichangaz]

I've got a personal pension invested through a financial advisor with about £300k. I've been thinking for a long time about withdrawing 25% tax free to pay off most of my mortgage, and emailed the financial advisor to tell them this is what I want to do. My advisor was out of office on Monday and I had a reply yesterday basically saying they were really busy due to workload and the imminent tax year end and by the time they been able to action it (suitability letter etc) it would be mid April. Obvs my investments would continue to fluctuate until then (I'd asked if they could be 'frozen' until the transaction took place). They said alternatively I can contact my provider and do it myself.

This feels like poor service to me, but I wondered if I was being a bit unreasonable? I've worked out I've paid over £15k in fees over the three years I've been with them, when my pension hasn't grown an awful lot (which I know is mainly outside their control).

When you say “frozen” what did you mean?

Because obviously you couldn’t “freeze” the rate

Personally… contact the provider. Very straightforward.

Over the last 3 years - have your investments performed well?

My pension is invested in the stock market. When I said frozen I meant I didn't want any more trades to take place as I didn't want to risk the value going down.

It's probably performed in line with the stock market over the last three years. The value has gone from about £267 in late 2019 to £307 now.

Net of fees - ie fees of £15k reflected in value.

I kept things pleasant but fired off my “advisor” a while ago as I resented paying their ongoing fees and thus depleting my already poorly performing investment. It was in a ready made portfolio so they were hardly poring over marketplace prices every day and moving my stocks around.

When deciding to make a withdrawal, I telephoned the provider who said they’d put the relevant form in the post - they couldn’t email it to me, only an advisor could do that apparently.

After a couple of days of no form arriving I rang again. They said I could send a letter in and told me what I needed to say, and to include a voided blank cheque to prove my bank account. I sent the letter by Royal Mail signed for, needed to ring them again to chase it but money landed in my account two days later.

The sale of my shares was instigated at midday on the first day I spoke with them, so my cash was sitting in their coffers. The form they were sending has not to this day arrived.

All delay tactics and a little bit of revenge for me firing off my “advisor” methinks.

that's interesting @7notrumps as I've thought about moving from my advisor too, possibly putting into the Vanguard SIPP which has much lower fees. My current portfolio is meant to be 'managed' ie they move investments around, but I'm not sure it's performed any better than Vanguard would have.

Did you move to another provider or are you managing it yourself?

Give them a chance.
It's the busiest time of year for financial advisers right now.
Where I work the pcls payment you require to pay off your mortgage would require a full suitability report with sustainability work carried out, to check how the withdrawal from your pension now could potentially impact your pension pot and your standard of living in the future.

All providers charge central management fees for managing the portfolio en bulk, I’ve just saved myself the additional nonsense of my personal advisor’s ongoing fees for doing bugger all. Rocking up at my house once a year with a charming personality, lots of coloured graphs and glossy folders isn’t necessary. If that changes then I will appoint a financial advisor.

The whole thing was a wake up call to take responsibility and not leave it to these advisors. I now keep a spreadsheet and record values of my investments from different providers on the same day every month. That allows me to compare performance percentages over time, as the figures are net after management fees.

I also note the FTSE 100, 250 and All Share on the spreadsheet so I can see how cheap tracker products would have performed in comparison.

I would point out though that these are simple stocks and shares ISA holdings, not SIPPs.…….and of course the universal get out clause about past performance being no indicator of future values, but it’s a handy guide to keep your own record once it builds up over time.

I’m at the opposite end of my investment journey to you. At my age I’m looking to gradually liquidate more holdings. Having the performance figures in front of me helps to pick off the poor performers first.

I wouldn’t tolerate the service you’ve had from your advisor, it’s very poor and disrespectful.

Meant to say too that I use online platforms to invest in ready made portfolios - including Vanguard, Hargreaves Lansdown, Aegon and Halifax. Over time they all seem to wax and wane in the popularity charts, but at least the ongoing fees are cheap.

So far they have all followed the same trajectory as the expensive product from my “advisor” with its outrageous initial fees.

Realistically, contacting them a couple of weeks before the tax year end, their busiest time of the year, you can't expect an immediate response. Especially this year with the CGT annual exemption being halved that is causing them a massive workload (same with accountants) as people try to sell investments to realise gains before they lose the £12k annual exemption, i.e. have to sell by 5 April.

They'll have clients who contacted them a few weeks earlier who are ahead of you in the queue.

Not particularly good service, but do you expect them to work 24/7 to get through all their work from people who, to be brutally honest, should have contacted them earlier rather than expect an almost immediate response?

The response and timescale doesn’t sound bad to me, so I think that’s not poor service - they came back to you ASAP with a date, explained the delay (tax year-end) and asked if that was acceptable.

Whether overall their services are worth the £5K a year fees is a different matter, I think.

Advisers are liable for their advice. If you take out your 25% tax free cash and then realise two months later it would have been much better left in the pension, you can’t put it back.

Especially where you have substantial assets in a pension, an adviser needs to take into account the full picture, I.e. your needs in retirement, your inheritance tax position etc. and provide you with a detailed report of the implications and should spell out the implications to you because, let’s be honest, nobody reads a 30 page report on pensions.

And selling down a number of funds is also not instantaneous.

While you have paid for advice, you should at least make use of it. Even if you have to wait a couple of weeks.

Your FA needs to instantly instruct encashment, even if they cannot trade, settle or be paid out immediately. Most funds trade daily.
The FA will be responsible for any market variation if they fail to act in a timely manner on your instruction.

Thanks for your thoughts everyone. I asked for details to contact the company direct and spoke with my advisor. In the end I decided to wait until he had capacity to advise me - after all I am paying for his advice, may as well make use.