Independent Financial Advisor-SW Surrey/Hants recommendaions

Orionaut

Orionaut

Orionaut

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Can anybody recommend the above to "Sign Off" the transfer of a defined benefit pension fund into a SIP??

Mostly this seems to be a ridiculously expensive procedure (Like, minimum £500 :eek: ) :mad:

I am trying to find the least expensive way of doing this...

I know what I am wanting to do and I know why I am wanting to do it. It is bloody annoying that this legally mandated "Protection against myself" is so expensive.
 
I would be surprised if any IFA would just sign off the transfer from a DB scheme especially without full analysis of the transfer, investing the funds on behalf of the client and giving regular reviews going forward. Would leave them open for to many potential complaints by the client.
 
I know one, though he won't sign off like that, but will review, discuss and recommend.

However he charges 1% and wont deal in investments of less than 150k minimum.

£500 seems reasonable for advice to be honest, but if the fund is small may seem excessive.
 
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as above - £500 is very low.

Bear in mind that when they sign off the advice - they will be carrying the liability of that transfer for ever more. The potentially complaint is not worth £500.

I know what I charge and it's significantly more than £500 minimum.

It might seem a lot if your fund is £5k but in reality there is just as much work involved for a £5k fund as a £500k fund.
 
£500 is simply not doable for this kind of advice, plus the FCA is about to be all over this for contingent charging.

If your transfer value is lower than £30,000 then you won't need advice and you will be able to find a few providers who'll accept the transfer. If it is over £30,000 then you will need advice, and there'll be more providers who will accept it.

"Protected against myself" combined with shifting regulatory goalposts are exactly why this is such a dangerous area. The industry is extremely cautious against people doing exactly this, and then in 20 years time when the money runs out and a complaint is made, being forced to put the customer back in the position they were with the addition of 8% interest. The professional indemnity insurance for transacting this kind of business is enormously expensive for that reason.

If you want to do it, you'll have to pay the market price for doing so. It'll be a good deal more than £500, and rightly so.
 
I'm an IFA and although the firm will advise on DB transfers, I am not sufficiently qualified to provide advice on the subject - we have an in house policy that only a Chartered adviser can give DB transfer advice. We also operate a "4 eyes" principle so any advice provided on a DB transfer is peer reviewed before it's issued.

We would charge an hourly rate for producing a DB transfer report.
 
EddScott said:
We would charge an hourly rate for producing a DB transfer report.
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that seems, at face value, more reasonable than the poster above commenting about a guy who will take 1%... then again I guess it depends on the hourly rate and how much work is involved in this

I can see why the OP is frustrated - it really ought to be simpler than this in the case where someone knows what they're doing re: investments (or even if they don't) there perhaps ought to be a route whereby they can wave any rights to come back to against IFA and make clear that their decision is entirely their own... if they then take some big losses in future as a result of their own investment decisions that should then be entirely on them
 
Tell that to FOS and the FCA. The former is turning into a consumer champion and the latter enforcing a nanny regulatory state.
 
Orionaut said:
Can anybody recommend the above to "Sign Off" the transfer of a defined benefit pension fund into a SIP??

Mostly this seems to be a ridiculously expensive procedure (Like, minimum £500 :eek: ) :mad:

I am trying to find the least expensive way of doing this...

I know what I am wanting to do and I know why I am wanting to do it. It is bloody annoying that this legally mandated "Protection against myself" is so expensive.
Click to expand...

Can you give the reason why you would want to transfer from a DB scheme to a SIPP?
 
Superior death benefits or a specific investment strategy are the excuses reasons normally given.

Transfer values are currently incredibly high and some schemes looking increasingly under pressure which are some of the other influencing factors, not to mention that emotionally having £1 million in your pension today sounds a lot better than a future promise of £25,000 a year.
 
The_Abyss said:
Superior death benefits or a specific investment strategy are the excuses reasons normally given.

Transfer values are currently incredibly high and some schemes looking increasingly under pressure which are some of the other influencing factors, not to mention that emotionally having £1 million in your pension today sounds a lot better than a future promise of £25,000 a year.
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This.

Another one of the main reasons is flexibility. You have full flexibility in how you draw benefits from a SIPP i.e. how much income you take each year.

With a DB scheme the income is increasing with inflation each year meaning that when an individual reaches say 90 the annual income would typically be a lot more than they require. In my experience most people would rather have the option of taking a higher level of income early in retirement when they can actually spend and enjoy the money.
 
The_Abyss said:
Tell that to FOS and the FCA. The former is turning into a consumer champion and the latter enforcing a nanny regulatory state.
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indeed that seems to be part of it... but the % thing is dubious too - not confined to IFAs either, some tax professionals (especially on the dodgier side) try to operate in this manner and with worse than 1% fees too

it sort of has the same flaws the restaurant industry has with tips - a larger table will require more work but someone ordering a £500 bottle of wine on a two person table could easily be paying the same amount as a ten person table despite the fact the waiter has had to do significantly less work for the same resulting tip

likewise if the person with the 500k pension essentially wants the same things as the person with the 1 million pension and requires the same amount of actual work I'm not sure that charging double the fee is really justified - more complicated cases might require more work but an hourly fee would seem to be preferable in a lot of cases

I think that just as fund managers are going to struggle to justify their fees given the competition from passive funds, ETFs and now hedge fund replication strategies I think also that some aspects of the IFA industry (certainly some of them more mundane work) will perhaps come under strain from robo advisers etc..
 
The percentage fee is perfectly acceptable, as it reflects the growing risk premium for the increasing sums involved. PI insurance for firms conducting defined benefit transfers is extraordinarily high, and the liabilities may not manifest for decades.
 
chief barker said:
Can you give the reason why you would want to transfer from a DB scheme to a SIPP?
Click to expand...

most already covered

Death benefits
investment flexibility
retirement timing flexibilty etc
Control your own funds


Also DB transfers valuations are at an all time high just now. Had one recently that was 38 times the value of the residual pension!
 
The_Abyss said:
The percentage fee is perfectly acceptable, as it reflects the growing risk premium for the increasing sums involved. PI insurance for firms conducting defined benefit transfers is extraordinarily high, and the liabilities may not manifest for decades.
Click to expand...

that seems slightly dubious, if the cost is a combination of the work and the risk but you're not adding any additional work then surely the cost wouldn't double for double the amount... the risk has doubled but that was only part of the cost
 
Which is why many percentage fees tier downwards as the value increases.

Don't like it? Plenty of flat fee options out there, but be aware for both options that contingent charging is in the regulator's crosshairs so get ready to pay a fee whether or not a transfer can be recommended.
 
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