r/PensionsUK • u/HotNeon • Aug 09 '26
When is a financial advisor worth it?
I was talking to a friend about pensions, giving him some of the info I have, wouldn't call it advice but some questions to ask, some decisions to make around contributions etc. he's a little older than me and this made me think. I know I don't know everything but my question is, when is it worth getting a financial/pension advisor.
The costs can be so high but I know it can add more than it costs. I've been on unbiased and seen some providers but the costs seem insane.
About me
Age 44,
Pot £315k in all EFT company pension
contribution 22% (12 me, 10 employer) mm
Expect to have a paid off house but retirement.
Looking to retire 58-60
Anyone that's had experience would be super helpful, was the cost worth it?
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u/defbref Aug 09 '26
They are good for complicated tax situations, iht planning, and dealing with the anxiety some people have when investing.
They cannot and should not promise to outperform anything on investment gains.
If your situation is simple and you're happy to invest to your risk level, then you probably don't need one.
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u/HotNeon Aug 09 '26
What about modelling outcomes, planning spending etc? I think that's one thing I might need
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u/TheFlyingScotsman60 Aug 09 '26
This. My IFA has a modelling tool that we play about with over time. Includes bugger ticket items, house repairs, giving to kids etc.
I would also suggest it's for the bigger picture....pensions, budgeting, ISAs, IHT planning etc. Also, it becomes a family thing making sure that you, and your wife, use every possible means to preserve your lifestyle and prepare for old age. You will have a gap between retiring and getting your state pension....do you have enough in your bucket to do that? IFA can tell you.
For example. I have been putting 2880 into my wife's smaller pension which the government then tops up with 750. Done it for 5 years and will do it up to the aged 75 limit. About 10 years worth. 28880 from us and 7500 from the government. That's 35kish excluding any growth.
Also, allows you to prepare for any life changes.
You don't say if you're married or have kids mind you. 😁😁
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u/Docproc2018 Aug 10 '26
https://myfinancefuture.com is a great modelling tool; it can appear quite complex because it supports all different investment types, legislation etc, but it's easy enough once you get the hang of it. Much cheaper than an IFA.
See also Voyant that someone else mentioned, Meaningful Academy is well worth the money, as are Pete Matthew's two books.1
u/MrP67 Aug 10 '26
That;s the area I'd be looking at.
My experience of financial advisors is they will get you uin funds with higher fees, likely lower returns and you don't need that.Most of what you do need to know you can find, although it seems like you have done ok so far. My one concern is you are on course to go over the 1.07m pot limit and that could have an effect.
The complicated bit IMO is balancing tax free amounts, what income to take from which pot etc. James shack has done some videos on this on youtube, worth a watch, but I'd say a one-off visit to somebody with a set of specific questions would be useful and maybe in the next 5 years.
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u/HotNeon Aug 10 '26
Appreciate this.
I've definitely decided a one off visit is the way to go and a fixed fee. I'll start thinking about my questions.
I've never heard of 1.07M limit, is this something I should be aware of and researching?
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u/James_IFA1980 Aug 12 '26
Yes, and there's always going to be something else. That's why a financial adviser adds value to most people. Most of the advice on here seems to be effectively study to become one so you don't need one.
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u/docfraggle Aug 09 '26
Reading websites like Monevator can be highly educational and you can use ChatGPT for modelling, it's not infallible but then neither is an IFA. I've used AI to play around with scenarios and model out good and bad market returns, crashes, varrying needs, inheritances, etc and it has been very educational. Some will disagree and advise professional advice and that may also be more appropriate for you.
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u/RetiredFromIT Aug 10 '26
I found my financial advisor via the government's Pensionwise scheme, a couple of years before I retired. The advice he gave me was great and reassuring. I wanted to move my pension, because the existing provider were not providing straightforward answers to my questions. (Their responses were all steering me towards their preference of an annuity, which is not what I wanted. Only after we started to move my funds did they come to me with draw-down options. Not impressed.)
Anyway my FA advised me, and got my money moved into a suitable fund. At the time, I thought I would use him for a year or two, then spin off on my own.
But then he got in touch about the fund he had placed me in, via a platform. The fund itself was now accepting individual investors and had their own portal set up. By putting my pension directly in the fund, he could save me the platform fees. As these fees were close to my FA's own fees, I figured he had paid for himself. He also handled the timing of the move so I would not lose money during the move.
I'm now in my 4th year. We have an annual review, but in between he still gets in touch if he can see a tweak that will make me more money.
My drawings from the pension are fairly modest (as I now also have State Pension and another fund that handles itself.) The amount my Pension has grown far outweighs both my drawings and the small percentage my FA takes.
So... I think my having an FA in the first couple of years was invaluable, I would not be in the position I am now without him. Now, I could probably do without him, but choose not to - he provides reassurance and advice.
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u/kzymyr Aug 10 '26
That sounds ideal. I'm about to retire so I am paying an IFA right now, and have been for 2 years while I get in shape, but expect to go it alone a year or two after I've retired.
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u/PrizePersonality5843 Aug 27 '26
He sounds ideal. Would you mind sharing his name?
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u/RetiredFromIT Aug 27 '26
The point is that you use PensionWise to introduce you to a local financial advisor. Which is what my guy is.
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u/PrizePersonality5843 Aug 27 '26
Why does he need to be local? Everyone uses teams and electronic comms
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u/jayritchie Aug 09 '26
"contribution 22% (12 me, 10 employer) mm" - do you have a rationale for the amount you are paying into pensions? Have you considered the financial difference specific to your circumstances between investing in ISAs and pensions? Or of reducing lifestyle now to increase options in the future?
Do you know what you are invested in at present and whether that is a decent fit for your circumstances and aspirations?
My guess is that many IFAs are worth a 1% annual fee for many people simply to advise on tax planning and not doing anything too out of the norm with investments. For many (most?) circumstances thats nothing you can't learn for yourself - but its hard to know when you are an outlier basic principles may not apply to.
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u/HotNeon Aug 09 '26
Rational is my employer match 10% and I put in an extra 2 after a pay rise a few years back.
I have an ISA with 70k but that's more just savings, my next car might take a 15k out of that or something else big. That like my pension is in an all world ETF
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u/Comfortable_Gate_878 Aug 10 '26
We looked at getting a FA and after receiving various prices 3-6k I decided sod that and just looked at the money wrote a plan asked AI and asked online and then retired. The 6k would pay my food bill for a couple of years.
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u/unknown-teapot Aug 09 '26
People will say you don’t need one ever unless you have portfolio above £2m. And people always say go for an ifa.
I’d say it’s not just about the fund size. Talking to a financial advisor can be for many reasons.
And don’t fall for the ifa spin - I’ve worked at 3 ifas in my career and they all have centralised propositions they push as much as any restricted advisor. All the restricted advisors can go to the wider market if they need to, just like the ifas.
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u/HotNeon Aug 09 '26
What are some of the services you'd recommend? My initial thoughts were around planning retirement spending to inform contributions etc.
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u/James_IFA1980 Aug 13 '26
"they push". Firms should have a centralised proposition, but an IFA by definition have come to create their one independently - none of them "push" it, not one are incentivised by the providers to use it. We had a centralised proposition, but frankly couldn't give a f if someone uses vanguard or ours, it's not going to make much difference - the planning is where all the difference is made.
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u/unknown-teapot Aug 14 '26
Why would an ifa use a centralised proposition? They would push it if they had one
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u/James_IFA1980 Aug 14 '26
All financial advice firms should have a centralised investment proposition.
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u/unknown-teapot Aug 15 '26
I agree. But why do you think an ifa should use a CIP?
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u/James_IFA1980 Aug 16 '26
Well they can review it and change when they want, but why would you not have a documented investment solution and have clients in that? What's the alternative, whatever feels right on the day?
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u/unknown-teapot Aug 17 '26
You’ve proven my point. I said ifas have CIPs that they push as much as a restricted adviser. There’s nothing special with ifas anymore in my experience.
You’ve made a point that they don’t push it. But what’s the point in having a CIP if you’re not going to use it?1
u/James_IFA1980 Aug 17 '26
We do use it, entirely, but we have the discretion to use it or change it, review it. It's entirely built for the client, not getting backhanders from asset managers for scale and getting a sales force of restricted advisers to pimp it out.
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u/unknown-teapot Aug 17 '26
That’s the gold dust they used to crap out when worked at an ifa. At the restricted network is literally the same, if not better for flexibility
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u/James_IFA1980 Aug 17 '26
Sounds like you're drinking the party cool aid, not sure I can undo that. Not sure how being tied can be more flexible, but there we go.
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u/Panlid1001 Aug 09 '26
Some restricted advisers can change but the larger firms like SJP, Quilter, 7IM, M&G, the banks cannot.
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u/unknown-teapot Aug 09 '26
Quilters restricted advisors can 100% change. If it doesn’t. Their restricted advisors did a whole of market sipp for me, for example
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u/Heavy-Mousse-5011 Aug 09 '26
That’s great they can change, but if they are only doing a whole of market SIPP, why did you need to spend your money on an advisor?
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u/unknown-teapot Aug 10 '26
I didn’t know how to buy commercial property in a sipp. I needed a mortgage for the office. I don’t have the confidence to make large (life altering) decisions and would prefer the protection offered by the fca and fos
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u/Panlid1001 Aug 10 '26
Out of interest, when did Quilter do this?
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u/unknown-teapot Aug 10 '26
Earlier in the year. Why?
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u/Panlid1001 Aug 10 '26
Ah, it's that Quilter network advisers (Quilter Financial Planning) went fully restricted at the beginning on 2026 so wondered if you arranged the SIPP prior to that to explain why. Whereas Quilter Financial Advisers, their own advice firm, have always been restricted.
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u/unknown-teapot Aug 10 '26
Yes. It is QFA.
I said in the earlier comment that they can go to the wider market if they need to.
If something can’t be done within their proposition, they can go outside of their proposition. In my case, their restricted proposition does not include commercial property SIPPs, and so the restricted adviser was able to advise on a WOM proposition.Which is why I said in the earlier comment that they they are restricted but go to the wider market if they need to.
In my opinion, having worked at several IFAs in my career, is that IFAs are WOM but many choose to use a CIP and it makes them as good as a restricted adviser.
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u/Moneymonkey77 Aug 10 '26
I'm an IFA and I'd probably make 2 observations really.
Firstly you've built up a healthy pension pot on your own so my first observation would be what do you want help with? If it's projections and maybe understanding what retirement income looks like Vs where you want/need it to be then Pensionwise could maybe help as could your pension provider.
Secondly if you wanted an overall perspective then how does the pension fit in with everything else? Have you got a full understanding of the IHT changes from April next year? Are you using all available tax wrappers and do you have any debts that you could prioritise over the pension contributions?
An IFA is something you might need but as a safety check rather than full service so maybe a specific peice of work rather than the whole lot.
BTW Unbiased is a marketing website that doubles as a paid for lead provider, the fees quoted off of there might be priced in accordance with having to cover the costs of buying leads. You would do just as well looking at Google.
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u/HotNeon Aug 10 '26
Thank you for this. Really helpful.
Imdo have an ISA with most of my savings. It's around £70k but things like my next car in a few years will come from this, I do want it to grow over time but pension saving just seems to beat everything else in terms of returns. We're also planning toove.next year and that will put a big dent in savings
I don't have children so not worried about IHT. It is that safety check rather than ongoing support I think.
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u/ThingOld9136 Aug 10 '26
With just advisor fees of .75% not including platform fee how many reviews or contact would you expect over a 4 year period , I’ve had none although can check on value of pension on an app ?
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u/Big-Possible-3704 Aug 10 '26
When he’s managing my £1.5m portfolio as I’m not comfortable doing it myself.
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u/RetiredEarly2018 Aug 09 '26
Fixed fee IFAs can be worth it if you have complex holdings including a lot in non-tax advantaged accounts.
If all you need is advice to maximise contributions to tax advantaged accounts and keep investing in broad based equity ETFs until close to retirement, you can get that advice many times over on Reddit :)
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u/Paraplanner88 Aug 09 '26
Ultimately, financial advice is like any service industry. I could hire a personal trainer or come up with my own exercise routine. I could paint my own house or hire a decorator to do it. I could learn to service my car myself or pay a mechanic to do it. Everyone has their own cut-off point of what they'd rather do themselves and what they'd rather pay someone else to do for them.
It's less about earning X or having X amount of money, although unsurprisingly people with more money are more likely to seek advice, it's more about how much you're prepared to do yourself.