IFAs, Pensions and Charges

I recently paid an IFA 350 for a pensions review - I wanted to work on a fee basis to avoid any bias.
My initial preference was to move out of w/p and consolidate my existing funds into a SIPP and this was indeed my IFA's recommendation. 350 for a few hours work seems a bit steep, but I guess it's par for the course.
But my problem is that the IFA has recommended a SL SIPP (most of my current pension is already with SL anyway) and this will result in an initial commission payment of about 6k to the IFA - plus an ongoing commission of 1%. I'm rather unhappy about this since :-
a) it seems wildly out of proportion to the effort involved in arranging the transfer (filling in the forms etc) b) since this is so profitable to the IFA, how can I be sure that my original fee based advice was unbiased?
Obviously I'll be taking this up with my IFA in the hope of getting some commissions returned, but in the meantime does anyone have any comments on whether this is normal, and advice on how I could have avoided it?
It seems that SL won't let me set up my own SIPP. Is this the same for all companies?
Thanks Jeff
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If you engage him on a fee basis surely he should pay back to you all commissions received.
Why not ask him why he prefers SL over sippdeal or Hargreaves Lansdown ?
(HL and many others allow you to set up your own SIPP)
Reply to
Miss L. Toe
Did you tell your IFA this initially..? Or was s/he just telling you what you wanted to hear/cold reading you..?
Sounds like you tried to do the right thing by your IFA, and your IFA screwed you.
Reply to

Life offices were caught napping by the advent of low cost SIPPs, they have now created there own, high costs SIPPs to sell to their existing customer base so that the customers can stay with what they know.
This is one such example.
It will be down to whatever contract was formed. If Jeff didn't agree to all commission being refunded then they won't be. The IFA is, imo, taking the piss. Jeff would be better off asking on here or the TMF Pensions forum or the TMF SIPPs forum
Cavendish is the other one.
SIPPdeal currently cost Jeff £0 setup fee (normally £100), £50 transfer fee, then the standard £0 per year admin
I use and am happy with SIPPdeal.
Reply to

IIUC, there are several components to charges, but broadly there are fund charges (which will be the same no matter what SIPP you invest from?) and there are SIPP charges. The SIPP charges cover commission costs and setup charges. Now, I believe that the main element of the SL SIPP charges are the commission - why they won't take instructions directly from end-users is beyond me (though I can guess). In principle I should be able to recover this from my IFA (watch out for that low flying pig!).
I engaged my IFA on the basis that everything would be fee based and transparent. He was happy to take a fee for the initial consultation but for obvious reasons he's now trying to persuade me that I might prefer a commission payment for the SIPP setup. I've now reminded him of our original agreement and he's agreed to present me with a fee-based alternative for the SL SIPP. It will be interesting to see how close to the commission level he manages to push that up to and how he manages to justify it.
It seems scandalous that SL insist on paying these grotesque commissions to agents whilst refusing to accept instructions directly from clients. I mean how long does it actually take to fill in a few forms for goodness sake - or am I missing something here?
Thanks, I'll look into that.
PS thanks to others who replied too.
Reply to

No, different discounts are given to different sales outlets. and don't get fixated on funds (unit trusts and OEICS). Exchange Traded Funds track all the major indices (~0 initial, ~0.4%pa annual) and Investment Trusts (say 1% market spread, ~1%pa annual) and shares (the 350 largest companies should cost no more than 1% spread, 0pa annual)

"All initial commission and any specially negotiated discounts on unit trusts and OEICs are passed on to your SIPP. See our Funds List for full details. Sippdeal Limited may receive renewal commission from fund managers."

Fund list
They want to outsource liability and admin costs to IFAs.
Yes, you should.
Is he an IFA or multi-tied ?
You should have been give a 'reasons why' letter detailing why he chose it over sippdeal, HL, Cavendish etc
Eh? You can go ahead with the SL SIPP, it's just that he should refund all commissions to you. He's almost tacitly admitted that he shouldn't have recommended SL.
There should be no need for more work if he'd done the job properly. I hope you're not paying for it.
Yes ! liability :-)
Reply to

Indeed you should be.
Remember what the S in SIPP stands for.
Interesting that the IFA appears to reccomending a SIPP, but doesn't want you to do the "Self" bit yourself.
Pay the IFA his 350 quid and tell him to sling his hook.
He does *nothing* for the 6K and sod-all for the 1% p/a afterwards.
(remember 1% AMC eats up 25% of your original transfer value over 25 years, before you even /consider/ the compounding effect of loss of the 6K)
SL exist to make money for their shareholders, so make sure you won't get stung for w/p MVAs and get control of the dosh youself.
HL get good press if you want to buy funds (& pay for fund managers...), but Sippdeal or Sippdealextra might be better if you want 0% AMC by cutting out the middle-men and buying equities/etc yourself (maybe including SL - LLOY shares are probably a better bet than any SW funds...).
Consider how much research (at fool.co.uk &
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and book-buying you could do for 6K's-worth of your own time.
My SIPP investment manager gets paid nothing, but will get 100% of the return ;-)
rgds, Alan
99 Ducati 748BP, 95 Ducati 600SS, 81 Guzzi Monza, 74 MV Agusta 350 
"Ride to Work, Work to Ride" SI# 7.067 DoD#1930 PGP Key 0xBDED56C5
Reply to
Alan Frame

.....and how could I forget Alliance Trust Savings !? purveyors of great products for decades -
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IFA's know fuck all, and will take every opportuntiy to shaft you. As I have said before - you can do better than them by sticking a pin in, taking account of the saved commission.
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"Jeff" writes:
Why not just say "Thank you very much" to the IFA, and then go to a salesman to make the purchases recommended by the IFA, maybe even buying directly from the company so as to avoid commission payments. That way, all the IFA gets is the fee you paid.
Reply to
Graham Murray
on of
Because he can't. Buying direct often involves paying top commission. This is how many financial products are sold (supposedly in an attempt to encourage people to consider taking advice). And this is why 'execution only' brokers have grown - to split the commission with the customer who doesn't want 'advice'.
I am talking generally, I know little of SIPPs and their set up costs (though I really struggle to work out what exactly costs 6 grand)
Reply to
Thanks for all the advice and comment.
Yes, I'm inclined to agree that IFA's are mostly a bunch of shiesters.
Having looked at the Sippdeal site I think I'll probably go that route. As someone has pointed out, SL (and other big companies) won't allow me to transfer myself from a PP into a SIPP and I'm not prepared to pay anything like a 2% commission - bloody cheek.
I really think the government should insist that all pension deals have their total commission and admin charges printed on the front page in big red letters. Perhaps then people would begin to see this scandal for what it is.
Thanks Jeff
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