Why use an IFA when setting up a pension?

There is an excess of financial advice available for most subjects today but unfortunately there is no guarantee of its quality or accuracy. From gambling, to shopping, to saving and investing, you are likely to come across far more opinions and messages than you really need to hear.

This can lead to confusion and uncertainty, two qualities which are undesirable when making important financial decisions. The mixed messages are also a reason why many people delay making financial decisions which could save them thousands of pounds.

Often a perceived complexity of the issues involved leads millions to stick with a status quo option which may cost them dear in the long-term. Whether it’s changing a savings account to an ISA, or switching credit cards or mortgage providers, it pays to be well informed and willing to make changes.

Making the best start

This is especially true with pensions. Whether its a company or private pensions scheme there is often pressure to pick a standard pension plan and while this is financially responsible, it may not be offering the best return for those concerned. This is where an independent financial advisor can help. Most people once they have a pension schemes set up have little desire to move it unless they are moving jobs or emigrating, so it really pays to have the best advice available to you from the start and to ensure this advice is relevant to your own personal circumstances.

Benefits of an IFA

• The best advice –An independent financial advisor is legally obliged to give you the best advice they can. This means they will spend time understanding your circumstances before  imparting you with their experience. An average person might spend  a few days or weeks researching pension options so it makes logical sense to speak to someone who has had years of experience in the pensions industry.
• Understanding the pensions market – Buying direct can sometimes be cheaper but consider the fact that for most people their pension will represent the largest sum of savings in their lifetime. An IFA can help you to understand the long-term trends that will really affect your annuity and they can also use the most up-to-date software to ensure that every option is looked and compared.
• Security – If something goes wrong with your pensions and you’ve relied on the advice of an IFA, you stand a good chance of claiming back compensation, if you have bought direct this is unlikely to be the case.

The value of an IFA

There fact that you can rely on receiving independent and unbiased financial advice which genuinely has your best interests at heart, says a lot about setting up a pension with an IFA. If you really feel that you know all you need to about the current pensions market, then setting up your pension directly can be a viable and financially responsible option, but for most people the services of an IFA offer tremendous value and using one to set up a pension plan is likely to be an incredibly worthwhile option.

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