Marriages always start so well and that’s the same if you are getting into a relationship with a spouse or your financial advisor.
Many people selecting an IFA find themselves in “shock and awe” at a handsome report presenting them with cash flow and investment modelling providing reassurance their financial future is in good hands. The prospect of a lifelong financial partner is most valued by those in later years for whom the relief of having financial matters taken care of is a key part of the happy retirement plan.
Most advisers follow through on the promises made in their initial proposal. But not all. Not all marriages between advisors and their clients turn out well. One journalist tells me she receives regular complaints about the lack of service clients get for an annual fee.
She cites a recent email describing the service received for an annual advisory charge on a pension pot.
“Basically I have an annual review where they advise not to do anything with the pension”
In the pensions industry , this is known as “set and go” and it enables some advisers to make a large profit from a proportion of their client bank who find this passive approach acceptable.
Commenting in New model Adviser, Eversheds’ regulatory specialist David Robinson accepts this is a problem (though describing it in a posher way)
Initial advice may well be robust, but how firms are assessing and what they are charging for ongoing suitability is paramount. This means areas such as revisiting risk, objectives, and cashflow forecasting. Simply facilitating an annual withdrawal and leaving the rest unchanged may not suffice.
What starts well, doesn’t necessarily end well so how do you walk away. Most people start by working out if they are getting value for money from the advice they are given and ask a simple question which can be hard to answer.
Am I getting fair value?
The concept of “fair value” is central to a new consumer duty to offer advisors will have to their clients. This duty is being established by the Financial Conduct Authority , whose job it is – to make sure that clients get fair value for the money they pay to advisers.
Fair value means fees need to be earned and the FCA has recently launched a thematic review on advice given in retirement which is likely to focus on the value for fees paid. As this chart shows, fees paid to advisors can be as high as 3.5% of the pension pot – (that’s as much as some people take as a drawdown income).

Sourced from SJP 2022 Value Assessment
The majority of people who put their affairs in the hands of an adviser are happy paying these fees , even if they run into tens of thousand pounds. The peace of mind the adviser is offering is felt to be worth it.
But there appear to be sufficient numbers of advised clients asking whether these fees are necessary and looking for an exit.
Walking away can be daunting for a number of reasons. Many people who have employed an adviser have done so because they complied with an instruction to take financial advice.
Some clients , typically those taking a transfer from a defined benefit into a pension pot did indeed have to take advice. Some of these appear to be under the misunderstanding that having taken advice over the transfer , they are under an obligation to do so in future. This is a mistake.
There is no need to continue to pay for advice through retirement (though it is often a good thing to do).
Others find that they have to wait a number of months or even years to walk away from an adviser without paying exit penalties. This is because of a contract entered into voluntarily and where such penalties exist, clients may feel they have no choice but to ensure they get better value while they wait for the penalties to decline and stop.
And some people just find the business of leaving an adviser too traumatic and don’t have the confidence to write explaining that they wish to give due notice of ceasing the contract.
I’ve been thinking about these people and, as an FCA authorised advisor , been considering how it might feel to be on the other side. This has been easy as I have been a financial advisor and have been fired because my advice decreased over time.
Filing for divorce
To ease the pain, here is a four point plan on how to walk out the door, it’s based on my experience.
- Step 1: Review Your Contract – make sure you know how you can walk away with the least pain to you, it may involve giving notice and it may involve some exit penalties. If you don’t feel they are fair, take it up with you advisor before you go to law (or the financial ombudsman)
- Step 2: Decide What You’re Going to Do Next. Make sure you either have a new advisor, a non-advised platform for your money or you’ve got a clear alternative strategy like buying an annuity. Taking your money away from your advisor and into your bank account scores high on the muppetometre, you will pay more to the taxman than you’d ever have paid in advisory fees.
- Step 3: Request a Copy of Your Investment Records. If you don’t have a record of what’s happened to your money by the time you leave, then you have no receipt. You may need to refer to what happened to your money later.
- Step 4: Divorce Your Advisor , cleanly and fairly. The end of your relationship need not be acrimonious.
Finding the words to mark the divorce can be painful so you may want to use a template.
These were the words I got from a client who divorced me. I found the simple factual approach easiest to accept. A short and to the point letter beats a lengthy explanation that sets hares running. Here’s the note I got.
Dear Sir
I have decided that I no longer want your advice on my pension money and wish to resign my contract from x/mm/yy.
I appreciate the work you have done for me but I consider that there are better options available to me elsewhere.
I will send you instructions on where I want the proceeds of my investments through your office to transfer
I would be grateful if you would acknowledge this letter. I thank you in advance for your co-operation .
Yours faithfully..
No one should leave until they have a place to go
But don’t set that letter till you have your next steps in place.
As with a divorce , the hardest of the four steps is working out what to do next. You need to have a plan for your pension pot. You may want to re-marry and find another advisor or you may prefer to invest on your own, which is lonelier but leaves you with more of your money to spend on yourself – or on making new friends.
Most of the non-advised SIPP platforms offer fees well below 1% pa and some a fraction of that, you don’t get the hand-holding from an adviser but if you have been put in a “set and go” pattern then you have paid for the strategy you are in and you are free to replicate it wherever you choose to move your money.
And moving your money is not that hard. If you choose Vanguard or Pension Bee , AJ Bell Hargreaves Lansdown, Interactive Investor, Fidelity or any other competent SIPP. Make sure that your personal details are recorded correctly by your new SIPP and your existing provider to avoid delays.
The transaction that moves your money from one SIPP to another should be done for you and it will take between one and ten weeks, depending on the complexity of the transfer
If you are moving to another adviser (re-marrying) you can expect your new adviser to speed things through.
As with marriage, you can of course choose to stay and sort things out. Many people who have divorced, wish they hadn’t. So only send that letter once you’ve explored all other avenues .
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