IFA Direct Home: Can you tell us a bit about your background?
Paul Corden: I have been in Financial Services since 1988, I worked for a large pension and investment company until 2013 as a business development manager working with financial advisers to help them grow their businesses and work more profitably.
IFA Direct Home: Who should be seeking advice?
Paul Corden: Ideally everyone should seek advice as the decisions they make today could have an impact on the rest of their lives. However, we understand that this is not always possible or affordable. We would certainly recommend any individual who is at or approaching retirement to seek advice as there are many choices available. It is vitally important that clients understand their options to ensure that they make an informed decision as some options are irrevocable and the cost of getting this wrong potentially outweighs any advice fees.
IFA Direct Home: Why should they seek advice over making a decision themselves?
Paul Corden: For the reason highlighted above that the cost of making the incorrect decision potentially outweighs any advice fees that are applicable. By seeking advice we would do an initial financial health check to establish their current position. Once we understand both this and the clients goals and objectives we would formulate a financial plan to help them achieve these goals.
IFA Direct Home: What financial pitfalls might people come across?
Paul Corden: Making the incorrect choice of tax wrappers or retirement options can be financially catastrophic. Once a tax wrapper is decided upon the choice of any underlying investment has to be commensurate with the clients attitude towards risk and capacity to withstand losses. Also withdrawing funds (particularly pension funds) could be financially penal from a tax perspective if they get it wrong.
IFA Direct Home: Can you explain the process of receiving financial advice?
Paul Corden: The starting point at Cotswold Independent Financial Services would be to offer an initial consultation (at our expense) at this meeting we would explain who we are, how we work and potential costs. We would then seek to understand the clients current and future financial position and how this is aligned with their goals. We would also obtain details of any current plans that the client holds to understand what their choices are. After this initial meeting we would send a follow up email to the client to reaffirm our initial discussions and outline the process moving forward including further clarification on costs.
IFA Direct Home: Do you find that a client’s initial objective changes following their first meeting with you?
Paul Corden: Although many clients objectives do not change, the vast majority will change how they go about achieving these objectives once they understand their choices and have received advice.
IFA Direct Home: How much does advice cost?
Paul Corden: This varies depending on the client situation and the complexity. As explained above the initial meeting is at our expense at this point we would articulate our costs and how these can be paid. As a general rule, at Cotswold Independent Financial Services we charge a % of funds which reduces at certain points. The maximum fee structure is 3% on the first £100,000, 2% on the next £150,000, 1% on anything above this amount. For our retirement planning service we have a minimum initial fee of £1500. The client can choose whether they pay this fee direct or whether it is facilitated by the new provider if a change is necessary.
IFA Direct Home: Isn’t it a catch-22 situation to be spending money to find out how to save money?
Paul Corden: We would always say that if we cannot demonstrate our advice is ‘adding value’ to the clients situation then no costs would be payable.
IFA Direct Home: How often do you review the financial situation with your clients?
Paul Corden: At Cotswold Independent Financial Services, we offer our clients the option of one or two reviews per annum but this is entirely their choice.