Using an Online Independent Financial Adviser

Written by Karen Bryan

dan collinsI decided that I was going to need some assistance in getting to grips with options for accessing my stakeholder pension. It was too complicated for me to fully understand and I wanted to make sure that I decided upon the best course of action to get the most cash from my personal pension.

Traditionally, consultations with an Independent Financial Adviser (IFA) have been face-to-face. However, I didn’t think that was essential. I already knew Dan Collins of PoppyRedIFA on Twitter. He came across as very honest and unbiased. We agreed that he’d give me advice in exchange for me writing up about the process.

Since January 2013, IFAs have had to charge a fee to their clients, versus making money from commission paid on products which they recommended to the client. I prefer the current model, as it gives you more confidence that the IFA will give you unbiased advice. Sometimes keeping your investments as they are is a reasonable option. In the past, it would be a brave IFA to recommend that course of action, as they’d make no money from it.

Dan and I had an initial chat on the phone, to get to know each other a bit better. Then I gave Dan details of my stakeholder pension provider, along with a letter giving him authority to get the information on my pension from the provider.

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Dan was then able to confirm the value of the pension pot, the fund in which the pension pot was held, the annual charge and any exit fees. He asked me for information about my husband’s pension and the minimum annual income we require.  During our next phone conversation, I was able to see the tables that Dan had prepared online using screen sharing software.

We looked into lots of options. Whether I should transfer my pension pots into a different fund with my current providers. If I should transfer my pension pots into a Self Invested Personal Pension (SIPP), so that I would have the option to take the 25% tax-free lump sum but be able to leave the remaining 75% invested. Whether I should go for income drawdown or an annuity. If I went for an annuity, should it be a level payment or index linked.

All throughout the process, Dan took on board my life objectives. He suggested that going for income drawdown could give me a higher pension, but appreciated that the continuing uncertainty of the value of my pension pot made me feel uncomfortable.

The best thing about working with Dan was that it forced me to think very seriously about what I wanted a pension to do for me, not necessarily what might technically be the ‘best’ option. He also emphasised that he couldn’t foretell the direction of the stock market, annuity rates, or the rate of inflation.  What he could do was help me to minimise the risks of things going pear-shaped.

I’m really glad that Dan has helped me to fully investigate my pension options. Although we never met in person, I don’t think things would’ve been any better. We spoke on the phone on several occasions, exchanged lots of emails and shared his screen online so allowing Dan to illustrate things visually. Obviously not having face to face contact cuts the cost of getting financial advice. The IFA doesn’t have to travel or maintain an office.

Dan can offer advice for investments and pensions of a value from £20,000 upwards. He offers two types of payment options, pay as you go or contract. You can get to know Dan by joining his free webinars, reading his blog and following him on Twitter.