Coming upto retirement - Alternatives and costs

confusedlanky

I am 64 and I am looking to transfer the various 'pension pots' i have into an income drawdown scheme. I have been in a sales and advisory capacity all my working life (not financial) and have no aversions to paying for advice.
I have a total 'pot' of around £150K. After I take out of the equation a pension policy with a guaranteed annuity rate of 10% with spouses benefits, and my cash lump sum I am left with about £100K to go into an income drawdown arrangement.
I do have other investments and would not be dependent on the drawdown to live.
I have approached an IFA recommended by a friend and am being asked to pay a combination of fee and commssion, £250 upfront to cover initial work, and on acceptance of the advice and giving the go ahead they will earn commission of 3.5% of the total , and 0.5% annually on the drawdown investment.
Are these charges reasonable, market average?

dunstonh

I have approached an IFA recommended by a friend and am being asked to pay a combination of fee and commssion, £250 upfront to cover initial work, and on acceptance of the advice and giving the go ahead they will earn commission of 3.5% of the total , and 0.5% annually on the drawdown investment.
Are these charges reasonable, market average?

No. Thats the typical maximum commission basis. A sum of £150k would be better on fee basis. Not commission basis.

The 0.5% p.a. is fairly normal and typically that is paid out of the natural annual commission (or offsets it if charged explicitly). Its the initial that you can get better with on fee basis. Around £1000-£2000.