She has about £500k invested in stock market funds (ISA and directly owned), draws a state pension as well as drawing an income from her investments which remain at a relatively stable amount (i.e. she draws money from those funds, which is pretty much off-set by stock market gains). She also has c. £80k pensions from a handful of providers that are currently untouched.
Her FA is with St James Place and he has just conducted a pension review. His suggestion - consolidate all within an SJP retirement plan. Initial fee for doing so is 4.5% of current value and then the annual fee is c. 1.5% compared with her current charges of 0.7% per annum.
![Surprised :o](./images/smilies/icon_e_surprised.gif)
Unless I'm missing something obvious, this doesn't seem to be in her best interests!
I'm entirely comfortable taking my own investment decisions (without an FA or IFA) but there are definite shades of grey as to how far I am comfortable with making recommendations for others.
To me, the FA's pension recommendation is just absurd. I am comfortable saying that you shouldn't move because of the costs. I may be wrong of course - the SJP pension fund may way outperform her existing funds so that my recommendation is wrong, but in those circumstances I will sleep easy if she takes my advice.
It is still quite a responsibility and when I say there are shades of grey - this is a positive change that is suggested (that is plainly bonkers). I see my advice as "whiter" because it is maintaining the status quo. But what about her ISAs and Funds? Those are all consolidated with SJP - the fees are a little opaque, but the management fee/ annual fee is at least 2%, plus an additional 2% on any new monies introduced.
My recommendation: Move it all into a low cost wrapper that reflects her risk appetite (little) - e.g. a Vanguard lifestyle fund with really low fees, saving probably around £5k per annum. That's "blacker", because it is a move away from her established adviser. If I give that advice, she takes it and the market tanks (along with her investments), she may "blame" me for bad advice, even if it would be given in good faith and with the best of intentions and from a reasonably well-informed basis. In reality, she probably wouldn't blame me but I would still feel a huge responsibility (even though the SJP alternative would also most likely have tanked had she kept them there).
The other dynamic is of course that at the moment I can make suggestions and speak to her about the decisions (but ultimately they are her decisions at this stage). But in a few years, who knows - the financial PoA that we have in place may be active and I may not be able to speak to her about those issues. So, what would I do in those circumstances? Make decisions, in good faith, with the best of intentions and from a reasonably well-informed basis or maintain the status quo with an (expensive) FA that doesn't seem to be making recommendations with her best interests at heart.
I would really welcome the collective's views on how to navigate these kind of tricky issues:
1) When family members ask you for advice/guidance, how do you deal with it?
2) In my circumstances, what would you do? I think I'm at the place where the pension suggestion is so egregious that even though it is against the adviser's advice, I'm going to wade in, but probably leave the suggestion to move the funds.
(please feel free to move this to a different board if more appropriate).