Financial advice is not just for the wealthy – anyone and everyone should use a financial advisor. Buy why? Its hard to quantify the benefits of financial advice, so Ryan E. Mellor of IFA Direct Home has complied 10 testimonials over the past year during 2014/2015.
How did we do this? Ryan E. Mellor of IFA Direct Home asked the following question to clients that had just taken an appointment with an IFA Direct Home advisor.
What do you like about IFA Direct Home’s service?
1. Easy to do, results will follow. Martin Roberts
2. Professional punctual informed. Chris Pearson
3. Ability to meet me at work and at a time suitable to me. Andrew English
4. Without the phone call from IFA direct Home it is unlikely I would have done anything about my pension. Peter Neil Simmonds
5. Performance, speed you are dealing with my request the pension advisors knowledge of the current market and his advice is honest and in my best intrest given my health situation. I have no complaints about the service I’m receiving it’s excellent. Shaun Bartley
6. The outstanding thing for me was your customer service. Angie Murray of IFA Direct in particular was most helpful and patient. A credit to your company. Andrew Jordan
7. Obviously the fact that it was a free review. I look forward to receiving any advice regarding possible improvements to the current situation I have with the three pension funds. (Then I can comment further about the service!) So far I have found nothing to dislike. Andrew Carter
8. The call that came was very timely as I was over due a pension review and just reaching the age of 55 I needed the knowledge of the new laws and how it effects me. Nigel Scott
9. Friendly approach , no pushy salesman trying to force you in to something yo do not want and very clear with his explanations,no jargon and big fancy words that make it difficult to understand. Peter Husar
10. Finding out more about the changes to the pensions market that will take place in 2015. Paul Beevers
Ryan Mellor, Co-founder at IFA Direct Home
If you are a financial advisor and you would like to work with us, please visit RMT Direct Leads.
Ryan Mellor Co-Founder at IFA Direct Home answers your most frequently answered questions.
Pension Holder: Why have you contacted me?
Ryan Mellor: Our call is in connection with the investigation carried out by the former Office Of Fair Trading and the current Financial Conduct Authority, into wide scaleovercharging by the UK’s pensions industry. The purpose of the call is to arrange an appointment with an IFA or restricted advisor.
Pension Holder: What happens at the appointment?
Ryan Mellor: What will happen at the appointment is that the IFA will complete a fact find before writing to your pension firm to get all the facts and figures from which he will prepare a report. From this he will make a recommendation – but only if he/she can better what you currently have. The review will have the intention of checking what your existing pension charges are.
Pension Holder: What’s in it for IFA Direct Home?
Ryan Mellor: IFA Direct Home offers marketing services for a fixed fee on behalf of companies within the financial services industry. See http://www.rmtdirect.com
Pension Holder: Whats in it for them (Financial Services Firm)
Ryan Mellor : Since the Retail Distribution Review (RDR), traditional commissions have been abolished. IFA Firms can only transfer pensions if they can save you money over and above what their fees are. The initial meeting is offered at no obligation, to see if this is possible.
Pension Holder: Who is IFA Direct Home?
Ryan Mellor: IFA Direct is a registered marketing brand within the financial services industry.
Pension Holder: What’s in it for me?
Ryan Mellor: The potential to save money and to improve the performance of your pension. There is no initial charge and no obligation and the professional independent advice is in plain English. You will receive a detailed report which includes a list of all charges coming out of your funds each year.
Pension Holder: What can you do better than my current pension provider?
Ryan Mellor: Before reviewing how your pensions have performed it would not be right for me to guess, as your pension might be performing well. After the review the financial adviser will fully explain your pensions past performance and only if it would benefit you, he/she will be able to give you the options available for the future.
Pension Holder: What are you selling?
Ryan Mellor: We are not selling anything. We are offering independent pension reviews without charge or obligation.
Pension Holder: I cannot take my pension until I am 55. Is there anything I can do?
Ryan Mellor: That’s a great question but I am the wrong person. By having the review these are exactly the type of questions that will be answered for you. But the short answer is no.
Pension Holder: Where did you get my number from?
Ryan Mellor: We purchase data from companies using only data that has been opted in. ie. The user has given permission from a website giving their consent for third parties to make contact.
We can upon your request provide a date and time stamp together with an IP address from where you opted in.
Pension Holder: Where are you guys based?
Ryan Mellor: IFA-Direct.com is a registered trading mark of RMT Group (UK) Ltd, which is a UK registered company. We operate a call centre based in Mijas Costa, Spain.
Pension Holder: Who is IFA Direct Home?
Ryan Mellor: IFA Direct Home is a brand owned by RMT Group (UK) Ltd. RMT Group (UK) Ltd is a specialist marketing company that specialises in leads generated for the UK’s Financial Services Industry. IFA Direct Homeconnects people like yourself with good quality local regulated financial advice.
Pension Holder: Are you regulated?
Ryan Mellor: No, we are not giving financial advice. We are an appointment setting or marketing company working on behalf of both regulated Independent Financial Advisors offering whole of the market and restricted financial advice who are all regulated.
Pension Holder: Do you vet the company itself?
Ryan Mellor: No, but we check to ensure that they are regulated by the Financial Conduct Authority (FCA). This regulation in itself is really the vetting process, which protects you in the fact that the right advice has to be given to you. You are also protected by the Financial Services Commission Compensation Scheme.
Under FCA ruling if they cannot better your present situation, then the IFA or advisor is obliged to leave your pension / investment where it is. So it really is a WIN WIN situation. You have nothing to lose but your time.
Pension Holder: How much will this appointment cost me?
Ryan Mellor: It varies, but the IFA will:
1. Sit down with you and complete a questionnaire or fact find which will determine your attitude to risk.
2. Contact your pensions company on your behalf
3. Write a report on his findings.
4. If he can save you money which is OVER and ABOVE his fee then his recommendation to transfer will be made.
5. If you want to go ahead he will then transfer the pension and his fee will be deducted from the principle.
6. He will only do this if it satisfies compliance and you are happy.
So if the annual savings are £800 and his fees are £800 and you had 12 years to go till retirement – then it may well worth be doing.
Pension Holder: Will it ever cost me money?
Ryan Mellor: No, the net result will only ever save or make you money. Under FCA guidelines the advisor can only give you advice if he can improve your current situation.
Say for example, you have a pension worth £100,000 and the charges are 1.5%. This means that £1,500 is being lost each year in fees. Modern pension can purchased for less than 0.5% annual charge, so here a £1,000 could be saved each year alone from taking a pension with lower annual management charges.
Pension Holder: How comes the pension companies over charge?
Ryan Mellor: At the start of 2013, the Retail Distribution Review (RDR) ended commission based selling for financial advisors. (except insurance) This the biggest shake up in financial services since Big Bang in 1986 . Prior to 2013, the IFA could have been motivated by placing your money in a scheme that paid him the highest commission. Now, the IFA under RDR has to charge for his or her advice in an upfront fee. His motivation now is to give you the best advice and locate pensions with low Annual Management Fees in order to satisfy compliance set by the FCA.
This is similar to using the services of an account or solicitor. However, the fee can be deducted from the principle, so you don’t have to pay for his services today.
With old fashioned pensions, (especially pensions from a decade or moreo ago) the chances are that your pension provider will skim up to a third of your investment returns from your pot through higher charges unless you do something about it.
This is because of the high back end charges that were applied to recover the commissions paid to the IFA upfront as it was effectively loaned to the IFA. Now this is either taken upfront or from the principle.
Only 45% of the UK population regularly review their pension. This is why the pension companies can get away with the high Annual Management Charges! Insurance is reviewed annually by around 80-90% of the population each year. Car insurance remains very competitive.
In the pensions industry the insurance companies know this and this is why they get away with the overcharges which can be very complicated to understand.
Pension Holder: Why is £12,500 the minimum?
Ryan Mellor: £12,500 is often the minimum as below this the benefits of the savings compared to the costs diminish rapidly. As a result many transfer requests are rejected by compliance which is there to protect the investor.
Pension Holder: Will my funds transfer being protected by the Financial Services Compensation Scheme?
Ryan Mellor: Yes.
Pension Holder: In summary what are the benefits?
Ryan Mellor: Top 10 Key Benefits are:
• Increase your final pension
• Check existing charges
• Reduce your charges
• Final pension projection
• Increase your tax-free cash
• Consolidate your existing pensions
• Up to date information
• Give yourself peace of mind
• Ensure your loved-ones receive the proceeds of your pension free of tax
In a recent study carried out by the former Office of Fair Trading (OFT) concluded that many workers paying into a pension were being short-changed by retirement firms with a complex array of fees where where there were up to 18 different hidden pension charges.
The OFT found the lowest Annual Management Charge (AMC) or pension charges being paid is half per cent and the highest, 2.30 per cent.
Since this investigation, IFA Direct* has been running a campaign to save people money by simply switching their pension to a cheaper scheme with much lower pension charges.
In the last year alone, IFA Direct has arranged in excess of 1,200 pension review appointments through its network of some 30+ IFA firms.
Results back from a recent IFA Direct survey, indicate that pension review appointments are converting at around 8 out of 10 cases, meaning that up to 80% benefit from the review in the form of saving cash. After all, the figures speak for themselves – a £50,000 pension pot -that can reduce its charges from 1.5% to 0.5% will save £500 per year.
The recent changes made in recent pension legislation in April of this year, gives pension holder access to 100% of their pension in the form of taxable cash at the age of 55. Savvy pension holders are now finally waking up to the fact that you can shop around and get a much lower Annual Management Charge, saving thousand of pounds in charges from their funds by turning to discount operators offering identical products for a fraction of the price.
No doubt, many people spend hours on the phone trying to get a cheaper quote on their car insurance. – yet they might only achieve a £50 saving. But switching to a cheaper pension provider could thousands of pounds, which can easily translate into a retirement income of 20% higher**
* All the FCA regulated advisors include both Independent Financial Advisors and Restricted Advisors are clients of RMT Direct.
Following changes to the pensions in April 2015, where inheritance thresholds were increased to £1 million per couple and persons can now cash in their pensions without having to purchase an annuity at 55. IFA Direct has seen a marked increase in the number of requests for Occupational Pension appointments in June 2015.
What does this mean?
From the pension appointment, you can get complete access to the transferred value of the fund
You can choose how the benefits are taken
You can take advantage of the new flexi access rules that allow you to decide how much you draw from your pension
It can allow you to take benefits from any age after 55 (rather than restricted to the final salary scheme rules usually age 65)
It could give greater tax-free cash
Transfer values could be higher at present because of low gilt yields
After death keep 100% of the benefits accrued in the scheme for your loved ones
Ryan Mellor, Co-founder at IFA Direct
If you are a financial advisor and you would like to work with us, please visit RMT Direct.
Was the IFA positive that he/she could improve the performance of your pension?
Out of a sample of 55 IFA Direct appointments that took place between Oct 2014 and June 2015, 52 out of 55 or 94% of appointments, stated that the IFA would be able to better the performance of their pension.
Did the IFA meeeting exceed your expectations as outlined by IFA Direct?
In the same sample, 53 out of 55 or 96% stated that the IFA Direct meeting with the IFA exceeded his/her expectations.
How satisfied are you with the Pension Review Meeting?
31 out of 55 or 56% were very satisfied with their appointment, whilst only 3 out of 55 or 5% were either neutral or unsatisfied. The remaining 39% were merely satisfied!
What disappointed you most about IFA Direct?
The vast majority 50 out of 55 or 90% stated “nothing” as their answer to what disappointed them about IFA Direct (not the appointment with the IFA). “not certain on fees” and an “over confirmation by of the appointment” as being two of the reasons for being disappointed.
What impressed you most about IFA Direct?
24 out of 55 or 43% stated Professionalism and 20 out of 55 or 36% stated Knowledge as their answer as to what impressed them most about IFA Direct.
What attracted you to a Pension Review?
16 out of 55 or 29% stated “Reducing pension charges”. 13 out of 55 or 23% stated “Finding out more about the changes to the pensions market that will take place in 2015″. 7 out of 55 or 13% stated “Peace of mind that my pension is performing”.
This is all it takes to literally save you thousands of pounds.
Pension Charges Warning
“Many workers don’t realise the extra fees they pay for pension funds can erode the value of their pension pot by as much as 40% – a staggering amount and a national scandal”
Gina Millner, Co-founder of Wealth Manager SCM Private
Yes it’s true. Life insurance is one of the only things that has actually gone down in price over the last few years! This is because of the increase in life expectancy.
There is a huge difference in premiums between all the different insurance providers. For example, the cost of £150,000 life insurance for a 35 year-old non-smoking male ranges from £11.39 per month to £25.00 per month. That’s a difference of 55%!
If you were a smoker when you took out your life insurance but have since given up, you could save a significant amount by reapplying as a non-smoker. Smokers pay nearly twice as much for their cover!
The same applies to other high-risk areas – if you are no longer overweight, you could cut down on the cost. Some of the plans can even be reduced if you decide to lead a more active life and join a gym.
If you have a review of your insurance needs, you could find that you do not have the right kind of cover for your circumstances – and again there is an opportunity for saving some money.
Most Independent Financial Advisers will do a quick check of your insurance policies to see if there is a need to review them.
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