Agile Financial - Chartered Financial Planner Logo

Our Second Opinion Service

Avoiding Costly Mistakes

Background

George filled out our online enquiry form after searching for independent financial planners online. He had been using a financial adviser for some time, but since their last meeting the adviser had partnered with a large wealth manager. He was concerned the adviser didn’t have his best interests at heart.

He had been given a recommendation to consolidate his pensions and investments into one portfolio with the new wealth management firm. A search for reviews on the new firm indicated they were reputed for high costs, inflexibility, modest returns and a sales driven approach. He understandably wanted a second opinion. We are always happy to do this, whether this is on new advice or plans that have been in place for some time.

Our Approach

As always we looked to understand his personal and family situation, future aspirations and risk profile. Two things stood out to us. Firstly, the pension would definitely be relied upon to provide retirement income for day to day living. There would be very little wriggle room in the future based upon current circumstances, future income requirements and ability to save.

Secondly, the existing plans did seem to be old. We know that many older pensions and investments  are now unsuitable because of changes to regulations, high charges and commissions and generally poor fund management. This means it was right to consider the review.

We make a promise to all clients that we will be open and fair, so we wanted to take a view on what his existing adviser had recommended. The bulk of our work here involved collecting information from the existing schemes, before analysing the details to give us a clear understanding of their features and suitability. We then presented our advice in such as way that that it was very clear how it differed from what had been offered.

The Outcome

The existing plans were clearly unsuitable. But having reviewed the recommendation made by the other adviser, we had concerns with this too.

Firstly, the plan was much more expensive than our comparable independent offering. There was a difference of some 0.56% per year in total ongoing cost. This might not seem a big amount, but bringing it into monetary terms is important. We calculated that given a reasonable rate of return over his time to retirement he could save over £9000 in charges. This was achieved simply by using a flexible pension scheme with a wide fund range and was after our advice fees had been taken into account! This is a sum which would certainly make a difference to his future.

Secondly, whilst past performance is no indicator of the future, the portfolio that was being recommended to him had very much under performed. Had he invested into this portfolio and continued to be disappointed, he would have suffered further advice costs and an exit penalty to move.

Our detailed report recommended a clear strategy for his pension and future retirement with a selection of quality funds from the wider investment market. We review these alongside his wider financial circumstances and changing life plans each year.  He is delighted with the portfolio and flexibility it affords him and we look forward to helping him to move into retirement in a few years time.