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Financial advice

  • 17-01-2018 1:26pm
    #1
    madnessnmayhem
    Registered Users, Registered Users 2 Posts: 201 ✭✭


    Hi I'm not sure if this is the right section but I am due to get a pension soon I've been asked to seek legal financial advice before making a decision. Is seeking financial advice free of charge if so where or would I have to pay for advice thanks


Comments

  • #2
    nuac
    Registered Users, Registered Users 2 Posts: 6,769 ✭✭✭nuac


    Have amended title for clarity.
    There are many financial and legal issues around pensions.
    Leaving open for general discussion.
    Personal observation: Advice on pensions should be paid for by a fee rather than commissioN


  • #3
    coylemj
    Registered Users, Registered Users 2 Posts: 25,620 ✭✭✭✭coylemj


    madnessnmayhem wrote: »
    Hi I'm not sure if this is the right section but I am due to get a pension soon I've been asked to seek legal financial advice before making a decision. Is seeking financial advice free of charge if so where or would I have to pay for advice thanks

    I am not a qualified financial adviser (QFA), use this information at your own risk. Seek professional financial advice before making a decision.

    The only time you will get 'free' financial advice is when the person giving the advice is going to get paid via the commission on the products they sell you. In the case of someone about to retire, that may involve putting some of your lump sum entitlement (the part that you cannot access tax-free) into an ARF and/or purchasing an annuity if you do not have a defined benefit pension which pays a set amount as a stream - a monthly pension.

    The annuity is potentially the dangerous part if you get the wrong 'advice' as rates very considerably and you need to make choices that you will be stuck with forever - (1a) do you want protection from inflation or (1b) do you want an income that increases at a set % rate p.a. (2) do you want a survivor (formerly widow/er's) pension when you die?

    Paying for financial advice means that you deal with a person who will give you independent advice which is not swayed by the potential commission from your business.

    You don't mention the word 'retire' but rather say that you are 'due to get a pension soon'. If this is from a defined benefit scheme you paid into a while back and you have the option to 'commute' some of the pension into a lump sum, the best advice you will get is this - do not convert any of the benefit to a lump sum, take all of it as a monthly pension. The reason is that any lump sum you get will be nowhere near what would be required to purchase an annuity to pay the income you will forego so it's pretty much always bad value for money to convert part of a DB pension to a lump sum.


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