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    • maggie62
    • By maggie62 22nd Nov 17, 7:36 AM
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    maggie62
    Final Salary Pension advice
    • #1
    • 22nd Nov 17, 7:36 AM
    Final Salary Pension advice 22nd Nov 17 at 7:36 AM
    As a 55 year old female with health issues I am considering transferring out of my final salary pension and have obtained a CETV of £300k.

    I have had a free initial meeting with an IFA who agrees that this is the best way forward, particularly as I also have a smaller final salary pension from a previous employer that starts to pay out when I turn 60.

    If I instruct the IFA to provide initial services and advice for his quoted fees of £1000, but then his partner firm advises against transferring out, I'd like to know what my options would be.

    Maggie
Page 1
    • Malthusian
    • By Malthusian 22nd Nov 17, 9:27 AM
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    Malthusian
    • #2
    • 22nd Nov 17, 9:27 AM
    • #2
    • 22nd Nov 17, 9:27 AM
    1) Take the IFA's advice.

    2) Transfer to a SIPP provider that accepts final salary transfers against advice. As far as I know there is only one. You will need to check that your IFA would be willing to sign the form confirming they had given advice; not all IFAs will do this as they fear being held liable later.
    • bostonerimus
    • By bostonerimus 22nd Nov 17, 12:03 PM
    • 1,215 Posts
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    bostonerimus
    • #3
    • 22nd Nov 17, 12:03 PM
    • #3
    • 22nd Nov 17, 12:03 PM
    What pension will you receive and what are the fees you'll pay if you take the CETV and do drawdown? How would the money be invested? The bottom line here is how much money do you need and the amount the final salary will provide and the amount that the invested CETV might provide?
    Has the IFA given you those numbers yet?
    Misanthrope in search of similar for mutual loathing
    • drphila
    • By drphila 23rd Nov 17, 3:10 PM
    • 30 Posts
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    drphila
    • #4
    • 23rd Nov 17, 3:10 PM
    • #4
    • 23rd Nov 17, 3:10 PM
    I am in the process of finding an IFA, myself.

    1) Take the IFA's advice.

    2) Transfer to a SIPP provider that accepts final salary transfers against advice. As far as I know there is only one. You will need to check that your IFA would be willing to sign the form confirming they had given advice; not all IFAs will do this as they fear being held liable later.
    Originally posted by Malthusian
    Only one of the big providers (A J Bell) accepts against advice, but there are smaller ones (Close Bros, Xaffinity).

    As pointed out, you can do nothing without the form/letter so make sure the IFA will provide this if they advise against.

    Make sure also that the IFA can meet the deadline because if not a new quote value could easy drop by £5/10k.

    £1000 seems very cheap compared to the industry norm of several thousands of pounds. Check on the FCA site that he has Permissions for Pension Transfer.

    Since I am looking for an IFA myself, would it be possible for you to PM me his name?
    • Malthusian
    • By Malthusian 23rd Nov 17, 3:34 PM
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    Malthusian
    • #5
    • 23rd Nov 17, 3:34 PM
    • #5
    • 23rd Nov 17, 3:34 PM
    I
    £1000 seems very cheap compared to the industry norm of several thousands of pounds. Check on the FCA site that he has Permissions for Pension Transfer.
    Originally posted by drphila
    I expect the £1,000 is just to provide the advice on whether to transfer out or not - what the OP describes as "the initial services and advice".

    If the IFA is also advising on and facilitiating the transfer to the new provider, you would expect further fees bringing it into the several thousands of pounds range.
    • maggie62
    • By maggie62 23rd Nov 17, 5:32 PM
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    maggie62
    • #6
    • 23rd Nov 17, 5:32 PM
    • #6
    • 23rd Nov 17, 5:32 PM
    Thanks for the replies everyone.

    Yes, the £1000 is only for the initial advice which seems to be a fairly standard fee.

    If the transfer takes place then further fees take the total cost close to £6000 or approximately 2% of the CETV.

    My main concern was spending £1000, being advised not to transfer out, and finding myself with no other options.

    Hopefully, taking into account my health issues, the transfer will proceed smoothly, but at least I now know that there are some firms that will accept transfers against advice,
    • C_Mababejive
    • By C_Mababejive 23rd Nov 17, 5:47 PM
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    C_Mababejive
    • #7
    • 23rd Nov 17, 5:47 PM
    • #7
    • 23rd Nov 17, 5:47 PM
    What does the IFA actually do for this mega 1% or so fee?

    What is the difference in the "work" needed to transfer 600,000 compared to say , 300,000 ?

    I do think IFA charges for such services are excessive and they get away with it as they are the key holders.
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
    • LHW99
    • By LHW99 23rd Nov 17, 7:45 PM
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    LHW99
    • #8
    • 23rd Nov 17, 7:45 PM
    • #8
    • 23rd Nov 17, 7:45 PM
    I suspect a good part will lie in the professional indemnity insurance required to cover advice on the larger pot
    • bigadaj
    • By bigadaj 23rd Nov 17, 7:51 PM
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    bigadaj
    • #9
    • 23rd Nov 17, 7:51 PM
    • #9
    • 23rd Nov 17, 7:51 PM
    What does the IFA actually do for this mega 1% or so fee?

    What is the difference in the "work" needed to transfer 600,000 compared to say , 300,000 ?

    I do think IFA charges for such services are excessive and they get away with it as they are the key holders.
    Originally posted by C_Mababejive
    Well if you see an opportunity dive on in.
    • Malthusian
    • By Malthusian 24th Nov 17, 10:55 AM
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    Malthusian
    What is the difference in the "work" needed to transfer 600,000 compared to say , 300,000 ?
    Originally posted by C_Mababejive
    Twice as much liability, people with more money typically have more complex needs, tax planning (Lifetime Allowance etc) is more complicated. Regulatory fees and professional indemnity costs all go up as assets under advice go up.

    And what makes you think it's all about cost? What is the difference in the work needed to carry a 31 year old on a train compared to transporting a 29 year old with a discount railcard on the same journey?

    As Bigadaj says, if you think you can do defined benefit transfer advice for £500 then go for it. You'd better hurry up because there's an absolute gold rush going on right now. If you offer DB transfer advice for £500 a throw you'll have clients beating down your door.
    • bostonerimus
    • By bostonerimus 25th Nov 17, 4:52 PM
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    bostonerimus
    The requirement that advice be take on a transfer greater than 30k has the financial advisors running all the way to the bank. Not only do they take the advice fee, they then try to get some sort of on going charges for "management" or subcontracting to a "wealth manager". All this overhead seems well baked into the UK system and is justified by an industry that belittles the average investor and makes things seem as complicated as possible. The final insult is that the insurance seems to be necessary given the results of that recent report that a majority of retirees got "bad advice" - whatever that means.

    If people end up paying 1% or 2% in fees during drawdown then many UK retirees will be far poorer than they need to be.
    Last edited by bostonerimus; 26-11-2017 at 12:41 AM.
    Misanthrope in search of similar for mutual loathing
    • bostonerimus
    • By bostonerimus 25th Nov 17, 5:02 PM
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    bostonerimus
    Hopefully, taking into account my health issues, the transfer will proceed smoothly, but at least I now know that there are some firms that will accept transfers against advice,
    Originally posted by maggie62
    Have you actually been given the income and risk comparisons between the final salary pension and the CETV used for drawdown. Do those comparisons include all the fees? Maybe you could share those with us to get some other opinions. If you do go through with the transfer how will you invest for drawdown income and how much do you intend to withdraw and have as income....again after all fees have been taken off.
    Last edited by bostonerimus; 25-11-2017 at 5:21 PM.
    Misanthrope in search of similar for mutual loathing
    • dunstonh
    • By dunstonh 25th Nov 17, 6:20 PM
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    dunstonh
    If I instruct the IFA to provide initial services and advice for his quoted fees of £1000, but then his partner firm advises against transferring out, I'd like to know what my options would be.
    This suggests that the IFA themselves is not making the advice recommendation but using a third party. Where that is the case, the IFA wont be signing off on anything. The third party will.

    If the transfer takes place then further fees take the total cost close to £6000 or approximately 2% of the CETV.
    That is high. Especially in addition to the £1k paid. Possibly high as the third party needs paying as well. You can get better than that.


    What is the difference in the "work" needed to transfer 600,000 compared to say , 300,000 ?
    Work is similar when talking about those two figures. The biggest issue is size of liability. If a £30k case goes wrong, its probably under the excess and cost little to put right. A £600k case could be talking hundreds of thousands of pounds to put right. Larger amounts also tend to have more complex issues.
    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.
    • C_Mababejive
    • By C_Mababejive 4th Dec 17, 9:28 PM
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    C_Mababejive
    Can anyone confirm then that if an IFA has arranged a DB transfer and then charges 1% AMC, part of that 1% is for payment of some kind of indemnity policy which must be paid every year that the IFA is contracted to provide advice?

    Clearly i am not qualified as an IFA. My expertise lies elsewhere but that does not preclude questioning of the system,charges and motivations.
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
    • dunstonh
    • By dunstonh 4th Dec 17, 9:54 PM
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    dunstonh
    Can anyone confirm then that if an IFA has arranged a DB transfer and then charges 1% AMC, part of that 1% is for payment of some kind of indemnity policy which must be paid every year that the IFA is contracted to provide advice?
    Ongoing advice is optional and can be cancelled at any time.

    Advisers are liable for the initial advice forever whether there is an ongoing service or not. IFAs do have to pay PI insurance every year and that does take into account past business but that has nothing to do with you being on an ongoing service or not. Like all expenses a business has, their total income goes towards their total expenditure.

    DB transfers do push the price of PI insurance up and that price remains up every year thereafter as the liability never drops off. However, there is no explicit amount charged against your 1%.
    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.
    • iro
    • By iro 8th Dec 17, 8:17 PM
    • 38 Posts
    • 17 Thanks
    iro
    Just completed a transfer out of a DB scheme very happy!
    • capital0ne
    • By capital0ne 9th Dec 17, 6:31 PM
    • 146 Posts
    • 80 Thanks
    capital0ne
    I have had a free initial meeting with an IFA who agrees that this is the best way forward
    Originally posted by maggie62
    Well he/she would advise you transfer your FSP - it's a quick £1k for the IFA.

    This is akin to getting a damp proofing company to survey your house for damp.

    Or for a tarmac company to advise on the best solution for your driveway.

    Or for a gas boiler engineer to suggest a heating system.

    Be very careful what you do and get at least three IFA's to advise, and maybe a tax consultant.

    This is going to be the biggest financial decision you're ever likely to make in your lifetime.
    • Linton
    • By Linton 9th Dec 17, 8:34 PM
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    Linton
    The IFA would make the same charge for the advice whatever it was and would be liable for the rest of his/her life for it being appropriate. The liability applies whether the advice is to transfer or not. Very different from a damp proofing salesman. Getting advice from 3 IFAs is just silly and very expensive.
    • dunstonh
    • By dunstonh 9th Dec 17, 10:42 PM
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    dunstonh
    Well he/she would advise you transfer your FSP - it's a quick £1k for the IFA.
    Quick? Hardly.

    This is akin to getting a damp proofing company to survey your house for damp.
    Rubbish. The IFA charges for the advice. The outcome doesnt change the advice charge.
    Be very careful what you do and get at least three IFA's to advise, and maybe a tax consultant.
    How would a tax consultant (whatever one of those is) help in this scenario?

    Getting advice from 3 IFAs means 3 lots of fees.
    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.
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