When preparing for a meeting with your pension advisor, it’s easy to focus on the questions you want to ask them. However, it’s equally as important that they’re asking you the right questions too – to ensure they find the right pension product to meet your requirements.
With that in mind, here are a list of questions that every reputable advisor should ask during your meeting.
10 Questions Your Pension Advisor Should be Asking
1) When do you plan to retire? If you’re still working, it’s important to establish when you think you’ll need your pension – and what your plans are after you’ve retired. Your pension should provide enough money to support you comfortably, but if you’ve got grander ideas for the future, you may require a different financial product.
2) What are your expectations? You should identify how much you’re willing to pay into your pension, and what you realistically expect to get out of it. A good advisor will discuss your expectations with you, then give you an idea of how achievable they are.
3) What is your attitude to risk? Your financial advisor should always assess your attitude to risk, in order to recommend the right product. Certain investment products, such as a SSAS or SIPP, may offer better returns, though are considered riskier.
4) What is your current state of health? Some pension plans may offer better retirement income, based on your existing health conditions. Certainly, your financial advisor should discuss your health with you, and if necessary, ask to view your medical records.
5) Is it better to stick with a work pension instead? A private pension should not be the only option on the table. In some circumstances, your work pension may offer a better pay-out, and your financial advisor should discuss this with you.
6) Have you considered all the options? There are plenty of pension plans on the market, and it’s your financial advisor’s job to give you a wide range of suitable options. If you feel like you’re not being told about all the products available, alarm bells should start ringing.
7) Do you understand the paperwork? Pension documentation can be confusing, and a good advisor will check to make sure you have a solid grasp of it. If there are any areas that you don’t understand – ask.
8) How do you want to access your savings? Some pension plans only let you take out money when you’re at retirement age, whereas others permit you to remove small chunks of money at a time, until it runs out. You should be asked about how you want to receive your money when the time comes.
9) Do you understand the tax implications? When you put money into your pension fund, it’s usually taxable (though 25% is tax-free). If you inject a considerable amount into the fund, you may even end up paying a higher rate of tax. Your pensions advisor should ensure that you understand exactly what tax you’ll be paying.
10) Are you happy with the final decision? Nobody should feel pressurised into investing in a particular pension plan. If you feel that you’ve been pushed into agreeing to a product you’re not entirely happy with, this could be grounds to seek legal compensation.