Fisherman,
If a potential client comes to us and asks us to review ARF providers, make recommendations on same and devise a suitable investment strategy - we would need to understand your risk appetite, loss tolerance and need to take risk i.e what level of return do you need to met your retirement income goals. As the query is focused on one aspect of their finances we would not feel compelled to do a full comprehensive financial planning exercise and therefore would not charge for that. We would quote a fixed price fee for the work which may be refunded if the client decides to take out the ARF via ourselves. We would fully expect to be paid for our time if you decided to go elsewhere. To give you a sense of the potential cost we would charge €750 plus VAT for a piece of work of this magnitude.
The client needs to do their own cost benefit analysis to see if that is good value or not and too a large extent it may well depend on the size of the ARF/Pension/investment. If the fund is €200k then we need to add value by approx 0.375% ( 200,000 * 0.375% = €750) . This can be by either by providing better value upfront or improved investment choices/performance over the medium term. If you asked 2 firms who charged the same then you are looking to add value by 0.7% ( 0.375% by 2)
Would I be confident that we could add value to make this worthwhile ? in a word yes and so would the other good advisers who post on this site.
Reason 1 - Better value .Look at this thread in the pensions section.
http://askaboutmoney.com/threads/initial-commission-on-pension-at-maturation.193034/
In this case we and many other advisers would improve the upfront net allocation rate by 2%.
Reason 2 - Better investment performance. In addition we filter all the various investment options to identify those with better long term performance ( we accept that this is historic and may not be repeated ).
What really surprised us is the difference in returns for the same asset class e.g Eurozone equities the difference between best in class and the sector average was 19.1% over 5 years. As the universe of providers is reasonably small we would definitely look to filter out the providers with a consistently poor track record. If we do this successfully then the savings/benefits will dwarf the 0.375% one off cost
Reason 3 - Better advice. When you pay for independent advice in general you get better quality advice as the adviser is working for you and is tasked to help/add value. Ask any adviser who you are thinking of working with for concrete examples of where they added value to previous clients. FYI we have a client who came for independent advice after getting some help with the pension scheme trustee firm. We were able to almost double the amount of tax free cash the client received compared to what the trustee was initially saying - and to be fair most other good independent advisers would have done the same thing for our client. The point is that the Trustee/Scheme adviser is mainly concerned with all the scheme members rather than prioritising your specific case. An independent adviser is working just for you. Good independent advice is nearly always money well spent.
Reason 4 - Peace of mind. Selecting and managing an ARF can be a hugely important decision that may impact your financial well being for many years. For important decisions do your homework and due diligence and you will be far more comfortable that you have made a well informed decision.
Apologies for the long reply,
Vincent
. I'll go the broker route to expand the options further...![clear[1].png](/data/attachments/0/400-9eb57d1b0ef40a6439106bee512f25d2.jpg){kind=small}