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    • GSP
    • By GSP 12th Mar 17, 2:36 PM
    • 125Posts
    • 17Thanks
    GSP
    Spooked by IFA - non Approval fee and Concern
    • #1
    • 12th Mar 17, 2:36 PM
    Spooked by IFA - non Approval fee and Concern 12th Mar 17 at 2:36 PM
    I had a brief call recently with an IFA using a list from those who are FCA approved.
    He said I would be lucky to find anyone who would approve me transferring out of a db pension because of risks. He said the default position for an IFA is not to approve these. He said he did not want to take things further, not to approve my wishes and charge £2,500 to £3,500 to boot.
    That's where I came to you guys.

    Can anyone suggest my best course of action to achieve the transfer. Is it going to be difficult finding an adviser. Any recommendations who charges the best rates with ongoing activity reviewing the income pot thereafter.
    Thank you.
Page 1
    • dunstonh
    • By dunstonh 12th Mar 17, 3:10 PM
    • 88,356 Posts
    • 53,569 Thanks
    dunstonh
    • #2
    • 12th Mar 17, 3:10 PM
    • #2
    • 12th Mar 17, 3:10 PM
    I had a brief call recently with an IFA using a list from those who are FCA approved.
    Just tidying up what you have said....

    The FCA does not have an approval list. ALL IFAs are authorised by the FCA otherwise they cannot be IFAs. The FCA publish a register that shows firms and individuals that currently or have previously (since 2001) held authorisations in any control function that is regulated.

    He said I would be lucky to find anyone who would approve me transferring out of a db pension because of risks. He said the default position for an IFA is not to approve these. He said he did not want to take things further, not to approve my wishes and charge £2,500 to £3,500 to boot.
    Historically, that is the position you would expect as in most periods as doing a DB transfer would be classed as a mis-sale in 4 out of 5 cases. However, we are in a short window where DB transfers are appearing to be better in a much higher number of cases than is normal.

    Is it going to be difficult finding an adviser.
    No. Although it will take some shopping around. Only around 1 in 10 firms will do DB transfers to begin with. That is usually the hardest bit. The prices they will quote will vary significantly between them once you have tried several.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • mark88man
    • By mark88man 12th Mar 17, 3:11 PM
    • 3,050 Posts
    • 6,409 Thanks
    mark88man
    • #3
    • 12th Mar 17, 3:11 PM
    • #3
    • 12th Mar 17, 3:11 PM
    How do you know that the transfer is the right thing for you to do.
    Things happen for a reason. Often the reason is we are stupid & make bad decisions.
    Weight 2/15 125.7 Kg : 31/12/16 - 105.5Kg : Targets - 100Kg by 3/17 then 200lb by 31/12/17
    1/17: CC:7524@0% - Car Loan:14K@3.4% - Mort:156K@2.9% - Savings:1k@4.5%
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    • sandsy
    • By sandsy 12th Mar 17, 3:12 PM
    • 1,134 Posts
    • 655 Thanks
    sandsy
    • #4
    • 12th Mar 17, 3:12 PM
    • #4
    • 12th Mar 17, 3:12 PM
    Why are you considering a transfer? Unless an adviser can demonstrate that it's likely to be in your best interests, they won't touch it.

    So what are your key reasons for wanting to transfer?
    • GSP
    • By GSP 12th Mar 17, 3:28 PM
    • 125 Posts
    • 17 Thanks
    GSP
    • #5
    • 12th Mar 17, 3:28 PM
    • #5
    • 12th Mar 17, 3:28 PM
    Thanks dunstonh. If the IFA does not approve, can I still carry on with it and will this cause a problem. Any suggestions on how to track down an IFA who deals with db transfers.

    Mark88man.
    Everyone has different circumstances and aspirations, but I have not taken this decision lightly. I am 55 in July with no prospect of work and my redundancy has nearly run out. From it however I put half into a dc pension, paid off the mortgage and all cards and excluding shopping and anything going wrong brings my bills expenditure to c£4,400 p.a. My db pension normal retirement date is 60, so to draw that early would result in a third loss in penalties straight away. My aspirations are to enjoy my remaining years to aged 80, then use my planned deferred pension of 13/15 years lump sum and monthly state pension thereafter. Current CETV numbers show this to be x 35 my db pension, and the tax free lump sum itself would be £192k. With 3 inheritancies likely in twenty years or so, I should and will be able to get through.
    Like many there are many decisions. I don't see what I would do with a db pension at 90 and be able to enjoy life as much as I can now.
    • dunstonh
    • By dunstonh 12th Mar 17, 3:51 PM
    • 88,356 Posts
    • 53,569 Thanks
    dunstonh
    • #6
    • 12th Mar 17, 3:51 PM
    • #6
    • 12th Mar 17, 3:51 PM
    Thanks dunstonh. If the IFA does not approve, can I still carry on with it and will this cause a problem.
    That is a question you need to ask the IFA. Some will not sign the disclaimers if they are worded that a positive outcome was required.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • xylophone
    • By xylophone 12th Mar 17, 3:57 PM
    • 22,026 Posts
    • 12,704 Thanks
    xylophone
    • #7
    • 12th Mar 17, 3:57 PM
    • #7
    • 12th Mar 17, 3:57 PM
    https://www.moneymarketing.co.uk/pension-transfer-advice-firing-line-fca-issues-new-guidance/

    https://www.finalsalarytransfer.com/Uploads/1435150759Tideway-Why-Use-Tideways-Final-Salary-Transfer-Advice.pdf

    You can try https://www.unbiased.co.uk/

    which will allow you to select your area and then filter by pension transfer and specialist only.
    Last edited by xylophone; 13-03-2017 at 9:33 AM. Reason: typo
    • mgdavid
    • By mgdavid 12th Mar 17, 11:42 PM
    • 5,172 Posts
    • 4,343 Thanks
    mgdavid
    • #8
    • 12th Mar 17, 11:42 PM
    • #8
    • 12th Mar 17, 11:42 PM
    ........ My aspirations are to enjoy my remaining years to aged 80, then use my planned deferred pension of 13/15 years lump sum and monthly state pension thereafter. ........
    Originally posted by GSP
    1. if you mean deferred State pension lump sum I believe this option has been removed and you will only be eligible for an increased pension.
    2. SP can be paid weekly or four-weekly, not monthly.
    3. Have you considered how you will pay for care or nursing costs when in your 80s and possibly 90s , having spent most of your pensions?
    A salary slave no more.....
    • GSP
    • By GSP 12th Mar 17, 11:57 PM
    • 125 Posts
    • 17 Thanks
    GSP
    • #9
    • 12th Mar 17, 11:57 PM
    • #9
    • 12th Mar 17, 11:57 PM
    Thanks mgdavid.
    1. Yes understand now the lump isn't paid. Wonder how much by deferring 13/14 years will increase my state pension.
    3. Interesting. From what we have heard, people will be living longer putting more of a strain on resources. There will have to be big investments made to make this sustainable. I haven't had any thoughts on this in truth, just getting by enjoying life is my main focus for now. Know people have houses sold etc to raise funds.
  • jamesd
    To avoid going over the same ground, others might review the very recent discussion with GSP in Nearly 55, Unemployed, sitting on potential large pension pot.

    No surprise that an IFA responded like that. They may not even do transfer business or might not have fully considered your situation, which is one where a transfer is reasonable.
    Last edited by jamesd; 13-03-2017 at 1:39 AM.
    • tacpot12
    • By tacpot12 13th Mar 17, 7:40 AM
    • 574 Posts
    • 503 Thanks
    tacpot12
    You are paying the IFA for advice. The advice costs the same whether you take it or not. So you need to find an adviser who is prepared for you not to take their advice.

    My IFA said that if their advice was not to transfer, they would still sign the forms confirming that advice had been taken and would record on the forms that the advice was not to transfer. This was a key discussion during the fee negotiation. They charged £1000 to review two DB pensions.
    • mgdavid
    • By mgdavid 13th Mar 17, 10:26 AM
    • 5,172 Posts
    • 4,343 Thanks
    mgdavid
    ......... Wonder how much by deferring 13/14 years will increase my state pension..........
    Originally posted by GSP
    30 seconds with google says 5.8% per year.
    You can do the arithmetic?
    A salary slave no more.....
    • stephen160
    • By stephen160 13th Mar 17, 3:06 PM
    • 20 Posts
    • 1 Thanks
    stephen160
    tacpot12
    Did you get a positive review? and would you mind letting us know the name of your ifa. £1000 seems a fair charge.
    • davieg11
    • By davieg11 13th Mar 17, 3:19 PM
    • 225 Posts
    • 104 Thanks
    davieg11
    I used unbiased and phoned local IFA's and luckily the 3rd one said he would do the transfer (as an insistent client) even if I didn't get a positive recommendation. In the end I got 2 positive recommendations so it was straightforward.
    • stephen160
    • By stephen160 13th Mar 17, 5:43 PM
    • 20 Posts
    • 1 Thanks
    stephen160
    davieg11
    Would you mind letting me know how much they charged. I off to see an ifa later in the week and would like to be prepared
    • davieg11
    • By davieg11 13th Mar 17, 7:07 PM
    • 225 Posts
    • 104 Thanks
    davieg11
    My IFA charged 3% of my pot and is taking 0.65% on an ongoing basis to look after the investments. I've read here that the normal cost is between 1% and 3%. My pot is small so it cost £2k, but when I put £1.6k back in then add tax relief, it's not too bad.
    • hyperhypo
    • By hyperhypo 14th Mar 17, 11:14 AM
    • 42 Posts
    • 5 Thanks
    hyperhypo
    I'm in process of considering DB transfer , got the valuation, presently getting TVAS (?) analysis done but don't yet know of any transfer charges.

    I'm sure in my case the decision will be close and likely come down on the stick side , and certainly any requirement to pay any more than 1% would add another line to the cons list (ie don't do it).

    Paying > £4000 would be prohibitive for my part.

    I'd be inclined to follow any advice provided .so no element of insistence.

    However if the analysis was favourable , is an IFA likely to take on this type of work on on a time and materials basis, e.g. as a contractual daily or hourly rate...this is the only way i've ever engaged with an IFA in recent past ...i had a question over choice of funds within a company scheme ...and it cost me a couple of hours in fees.........which i felt was good value , and would be happy to work again on this basis.

    Might this apply to DB transfers ?
    • dunstonh
    • By dunstonh 14th Mar 17, 12:05 PM
    • 88,356 Posts
    • 53,569 Thanks
    dunstonh
    However if the analysis was favourable , is an IFA likely to take on this type of work on on a time and materials basis, e.g. as a contractual daily or hourly rate...this is the only way i've ever engaged with an IFA in recent past ...i had a question over choice of funds within a company scheme ...and it cost me a couple of hours in fees.........which i felt was good value , and would be happy to work again on this basis.
    Remember a DB transfer is not just about time. You cannot compare 4 hours doing an ISA with 4 hours doing a DB transfer. DB transfers are more about risk and liability. Although there are added costs as those that do DB transfers have higher running costs.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • hyperhypo
    • By hyperhypo 14th Mar 17, 12:34 PM
    • 42 Posts
    • 5 Thanks
    hyperhypo
    @Dunstonh

    Fair enough ...i wasn't wishing to make the fund choice / DB transfer in terms of same hours, rather asking whether anything other than % charging might be doable, not least as a seemingly (to me) high % based feel would preclude me going ahead.
    • dunstonh
    • By dunstonh 14th Mar 17, 12:58 PM
    • 88,356 Posts
    • 53,569 Thanks
    dunstonh
    @Dunstonh

    Fair enough ...i wasn't wishing to make the fund choice / DB transfer in terms of same hours, rather asking whether anything other than % charging might be doable, not least as a seemingly (to me) high % based feel would preclude me going ahead.
    Originally posted by hyperhypo
    Firms all have different options. Fixed fee is popular. Hourly rate is least popular with consumer. Percentage is just easy and popular which is why it is common.

    You can ask firms if they will do it. Some will. My only point was that it would likely be at a high risk hourly rate rather than their conventional hourly rate.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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