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  • FIRST POST
    • Fibo
    • By Fibo 17th May 17, 10:07 PM
    • 4Posts
    • 0Thanks
    Fibo
    IFA Fees DB Transfer
    • #1
    • 17th May 17, 10:07 PM
    IFA Fees DB Transfer 17th May 17 at 10:07 PM
    I am in the process of transferring two DB schemes which have multiples in excess of 35 times. My IFA has asked for 2% of each pot to advise on and sign the transfer forms!

    How is the size of the pot relevant to the fee charged? The effort to crunch numbers is the same whatever the size!

    I have been previously registered with AFBD, SFA, FSA, SEC, NFA and have managed OPM. I am as qualified to sign these forms as an IFA. I certainly will not pay a % fee and I am looking for a simple fixed fee based on effort expanded. Any options out there?/
    Last edited by Fibo; 17-05-2017 at 10:11 PM. Reason: typo
Page 1
    • Fibo
    • By Fibo 17th May 17, 10:31 PM
    • 4 Posts
    • 0 Thanks
    Fibo
    • #2
    • 17th May 17, 10:31 PM
    • #2
    • 17th May 17, 10:31 PM
    Having read some other threads I should add that I am transferring into a SIPP, which is already set-up and has had my DC pensions transferred into. There is not necessarily a fee trail for the IFA as I intend to make my own investment decisions. As I am not eligible for "private client" protection under FCA rules and am classified as an "experienced" investor, there must be considerably less liability for the IFA in my case?
    • dunstonh
    • By dunstonh 18th May 17, 1:42 AM
    • 89,513 Posts
    • 55,949 Thanks
    dunstonh
    • #3
    • 18th May 17, 1:42 AM
    • #3
    • 18th May 17, 1:42 AM
    How is the size of the pot relevant to the fee charged?
    Liability. The larger the pot, the greater the risk to the adviser and the firm.

    Also, many of the costs an IFA faces are percentage based too. If you have been registered with the FSA (and I assume you mean the old FSA and not the food standards agency) then you would know this as the FCA, FSCS, FOS etc have all their levies on percentage basis for example. PI insurance is percentage based. Plus, PI insurance has a £1.7 million minimum set by FCA. If you are dealing in occupational pension transfers then you are likely to need far more than that. So, up goes that percentage again.

    I have been previously registered with AFBD, SFA, FSA, SEC, NFA and have managed OPM. I am as qualified to sign these forms as an IFA.
    So, you hold the AF3 or similar qualification and the regulatory permissions and requirements from the FCA?

    As I am not eligible for "private client" protection under FCA rules and am classified as an "experienced" investor, there must be considerably less liability for the IFA in my case?
    What are these classifications you are referring to?

    There is Professional client, Retail client or eligible counterparty. The vast majority of people are classed as retail clients. If you dont meet the professional criteria then you will be retail.

    Retail means the IFA has the same liability whether you are clueless, highly knowledgeable or just think you are highly knowledgeable.
    Last edited by dunstonh; 18-05-2017 at 10:31 AM.
    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 an Independent Financial Adviser local to you.
    • sandsy
    • By sandsy 18th May 17, 7:39 AM
    • 1,215 Posts
    • 712 Thanks
    sandsy
    • #4
    • 18th May 17, 7:39 AM
    • #4
    • 18th May 17, 7:39 AM
    The effort to crunch numbers is the same whatever the size!
    Originally posted by Fibo
    I'll comment on the bit dunstonh missed!

    An IFA isn't allowed just to crunch the numbers. They have to make a full assessment of whether the transfer is a suitable transaction for you to undertake based on your personal circumstances. Crunching the numbers is just the starting point.

    It's considered one of the most complex pieces of advice and is a regulated activity in itself of which advising on investments also usually forms a part. Advising you to transfer without taking account of all relevant information carries a large degree of risk for an adviser; equally, not advising you to transfer when it would be in your best interests carries risk too. This risk is priced into the charges you pay. Don't expect it to be a walkover that an adviser will agree to transfer for you - and do ask about their insistent client processes.
    Last edited by sandsy; 18-05-2017 at 7:44 AM.
    • Fibo
    • By Fibo 18th May 17, 8:20 AM
    • 4 Posts
    • 0 Thanks
    Fibo
    • #5
    • 18th May 17, 8:20 AM
    • #5
    • 18th May 17, 8:20 AM
    Thanks for both of the replies so far, I will check the classifications at the FCA as I would thought I would qualify as a professional client.

    There are some other overriding factors that make this transfer a sensible transaction for me, I am unlikely to live beyond 75 which not only means the multiple I am being offered is generous but that my beneficiaries will receive the money from the SIPP tax free. Far better than the terms in the DB scheme for my widow. Secondly I have fully paid buy/lets already returning more than 3 times what my DB pension would pay in annual income, let alone the capital gains.
    • tacpot12
    • By tacpot12 18th May 17, 8:31 AM
    • 735 Posts
    • 634 Thanks
    tacpot12
    • #6
    • 18th May 17, 8:31 AM
    • #6
    • 18th May 17, 8:31 AM
    A year ago I paid £1000 for an IFA to "crunch the numbers" in two DB schemes with a combined transfer value of £70k.

    The cost to transfer was a seperate charge and depended on where it was being transferred to. The transfer work is little more than office admin, and something I knew I could do myself if I wanted to transfer to my existing SIPP.
    • dunstonh
    • By dunstonh 18th May 17, 10:40 AM
    • 89,513 Posts
    • 55,949 Thanks
    dunstonh
    • #7
    • 18th May 17, 10:40 AM
    • #7
    • 18th May 17, 10:40 AM
    Like any business, you will find cheap, expensive and those in between.

    There are concerns building that some companies are being positioned to do bucket loads of pension transfers relatively cheaply but not to the required standards and then close down just as the complaints start coming in. Therefore dumping their liabilities onto the FSCS.

    I forgot to mention that the FCA have the starting position that DB transfers are mis-sold unless proven otherwise. You may have the best reasons and you may be totally correct that it is right for you. However, the adviser doesn't have the luxury to accept your point of view. Between 1988 and 1994, there was a similar period where people thought it was best to transfer out of DB schemes as they felt they could make more money that way. Actuaries agreed with them using assumptions that were considered common sense at the time. It turned out to be completely wrong and a very bad thing to do. This time around, transfer values are higher but it wouldn't take much for people to end up worse off. There are possible scenarios where it can happen and you know that those people won't accept it was their decision. They will look for someone to blame.
    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 an Independent Financial Adviser local to you.
    • allan7272
    • By allan7272 18th May 17, 12:19 PM
    • 3 Posts
    • 1 Thanks
    allan7272
    • #8
    • 18th May 17, 12:19 PM
    • #8
    • 18th May 17, 12:19 PM
    Hi

    I am also looking for a reasonably priced IFA for a transfer suitability report.

    Would anyone be able to suggest an IFA, or send me a private message?

    Much appreciated - Allan
    Last edited by allan7272; 18-05-2017 at 12:22 PM.
    • CFrog
    • By CFrog 18th May 17, 12:27 PM
    • 56 Posts
    • 36 Thanks
    CFrog
    • #9
    • 18th May 17, 12:27 PM
    • #9
    • 18th May 17, 12:27 PM
    I'll comment on the bit dunstonh missed!

    An IFA isn't allowed just to crunch the numbers. They have to make a full assessment of whether the transfer is a suitable transaction for you to undertake based on your personal circumstances. Crunching the numbers is just the starting point.
    Originally posted by sandsy
    Sandsy. Interested in your comment ref IFAs making a ' ... full assessment ... circumstances ' (above). Is this requirement set out in some guidance / rules somewhere?

    I am in the process of transferring a DB pension into a SIPP. The IFA has requested a large amount of data from my current pensions provider (I guess to allow them to complete the TVA calcs) along with some 'personal circumstances' data from myself (on income requirements, investments, attitude to risk etc). I am unclear on how the latter is taken into account by the IFA?
    • Silvertabby
    • By Silvertabby 18th May 17, 12:44 PM
    • 1,778 Posts
    • 2,149 Thanks
    Silvertabby
    I am in the process of transferring a DB pension into a SIPP. The IFA has requested a large amount of data from my current pensions provider (I guess to allow them to complete the TVA calcs) along with some 'personal circumstances' data from myself (on income requirements, investments, attitude to risk etc). I am unclear on how the latter is taken into account by the IFA? Posted by CFrog
    It's really quite simple. If you were to tell the IFA that you are totally risk averse, then no IFA worth his/her salt would ever recommend that you transfer your funds from a risk free DB pension into an investment that can go up or down at the whim of the stock market.
    Last edited by Silvertabby; 18-05-2017 at 12:47 PM.
    • LOST
    • By LOST 18th May 17, 4:33 PM
    • 284 Posts
    • 65 Thanks
    LOST
    Health and personal objectives are other important factors also to consider
    • allan7272
    • By allan7272 16th Aug 17, 12:33 AM
    • 3 Posts
    • 1 Thanks
    allan7272
    Finally found an outfit who were just right for what I wanted. Andrew Collier-Worsell of FixMyPension . Com

    If you are looking for just a DB pension xfer they are a very no nonsense service, who gave me just what I needed at a very reasonable price. Just a completely different vibe from most of the other IFA's I stumbled upon. No hard sell of what I must buy into, no crazy percentage fees - a real breath of fresh air.

    And in the end due to my laziness we had a tight deadline to hit before a DB quote expired, and they got everything together in less than 10 days.

    Regards - Allan
    • TBC15
    • By TBC15 17th Aug 17, 2:23 PM
    • 226 Posts
    • 79 Thanks
    TBC15
    I recently transferred a pension worth £174000. I was given various estimates 2-3%, fixed fee of £3000 and in the end I paid £1500 to a local IFA.
    • Arshad 00
    • By Arshad 00 17th Aug 17, 6:46 PM
    • 422 Posts
    • 944 Thanks
    Arshad 00
    I recently transferred a pension worth £174000. I was given various estimates 2-3%, fixed fee of £3000 and in the end I paid £1500 to a local IFA.
    Originally posted by TBC15
    Local to where ? A PM would be appreciated.............with some detail.
    • TBC15
    • By TBC15 20th Aug 17, 2:09 PM
    • 226 Posts
    • 79 Thanks
    TBC15
    Local to where ? A PM would be appreciated.............with some detail.
    Originally posted by Arshad 00
    You have mail.
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