Reasonable fee for transferring pension plan?

Jack_Griffin

marathonic wrote: »

Maybe it's just me - but if someone chances their arm with a high price like that, I tend to NOT give them the opportunity to match the better price that I've found elsewhere.

I want an advisor that I can trust and that doesn't appear to be the case here!

Hear hear.

PeterBen2013

I raised this with the adviser who mentioned the costs of FSA regulatory contribution for consumer protection which he says means he could not go below 1.5%.

He has offered me 1.5% - I think that is a reasonable reduction and I would welcome any feedback.

mania112

He can go below 1.5%, he can charge whatever he wants.

If you're happy to pay 1.5% there's no problem. But you definitely will find others who will do it for less.

jamesd

You're being quote way more than is usual, for both the transfer and the ongoing advice. With the amount of money you have you should be looking for hourly rates and paying more like half of the best current offer from this person for both the transfer and the ongoing advice.

Is there some special or particularly good investment advice that you're getting? Is this an especially high cost area, maybe central London?

Are you actually buying an annuity now? What sort of other changes might be included in the cost?

1.5% is a nice reduction but still more than you really need to be paying for the service. More like £1,000 to £1,500 for a simple transfer in a normal cost area and 0-3-0.5% for ongoing advice. Your adviser might be using percentages that in effect make you subsidise those with smaller pension pot sizes. That's part of why advisers are required to offer fee-based options and should be offering hourly rates as one option.

This isn't a particularly great time of year to be asking IFAs to do things, it's a fairly busy time with the new tax year approaching. Maybe offer £1,000 but adviser picks a low workload time of their choice between May and October to do the work.

But if you do want ongoing advice and there's nothing really special about this adviser, shopping around seems like a good idea.

Neverland

You could do a transfer yourself for no more than £500, probably less

So this saves you about £4k on the "better" transfer fee your "financial adviser" is quoting

There are SIPP out there that don't charge annual fees apart from £15 a time dealing costs, people like Hargreaves Landsdowne probably wouldn't cost more than £200 a year unless you deal a lot

Manage your Sipp yourself save another £3,000 a year

The new FSA investment growth projections are about 5% a year I think - so the 1% your "financial adviser" wants to charge you is about 20% of the returns you will get!

On top of the fund manager charges I hope its not hard to see that there won't be any investment returns left for you probably

If you want to be robbed by an IFA your look-out

dunstonh

I raised this with the adviser who mentioned the costs of FSA regulatory contribution for consumer protection which he says means he could not go below 1.5%.

Yes, regulatory costs are expensive (too much so) but that is not a valid excuse.

Is he an employee adviser by any chance? That may explain it as an employee adviser would share their remuneration with their employer. A common business model can see employee advisers only getting 20% of the remuneration. So, it may be that "he" cannot afford to do it cheaper.

1.5% is a nice reduction but still more than you really need to be paying for the service. More like £1,000 to £1,500 for a simple transfer in a normal cost area and 0-3-0.5% for ongoing advice. Your adviser might be using percentages that in effect make you subsidise those with smaller pension pot sizes. That's part of why advisers are required to offer fee-based options and should be offering hourly rates as one option.

There is no requirement to offer hourly rates and research has shown that hourly rates are the least desired option by consumers. Whilst early days of RDR preparation did see widespread interpretations cross subsidy was not allowed, it is actually allowed but its not really possible to the same extent as it used to be.

dunstonh

The new FSA investment growth projections are about 5% a year I think - so the 1% your "financial adviser" wants to charge you is about 20% of the returns you will get!

No its not. You appear to misunderstand the difference between example and reality.

atush

marathonic wrote: »

Maybe it's just me - but if someone chances their arm with a high price like that, I tend to NOT give them the opportunity to match the better price that I've found elsewhere.

I want an advisor that I can trust and that doesn't appear to be the case here!

His new offer is still too high (and what did he say about iongoing advice as he is overcharging for that too?).

Go elsewhere is my advice https://www.unbiased.co.uk

Neverland

dunstonh wrote: »

No its not. You appear to misunderstand the difference between example and reality.

I understand perfectly well that the EXAMPLE returns previously used by salesmen in the financial services industry (like YOU) have previously been shown to be hugely over-optimistic in REALITY

This is why the example returns used have just been drastically reduced

Conveniently the much higher returns previously used, didn't make the huge fees look such a drag on returns, but you already know that don't you

dunstonh

understand perfectly well that the EXAMPLE returns previously used by salesmen in the financial services industry (like YOU) have previously been shown to be hugely over-optimistic in REALITY

How do you explain that in one of the worst investment decades on record that the most commonly used funds for pensions managed to perform in line with the mid rate projections on the current level and above the level of proposed levels?

If you are going to be rude to people then it also pays to get your facts right. Being rude and wrong just makes you look stupid.

Conveniently the much higher returns previously used, didn't make the huge fees look such a drag on returns, but you already know that don't you

Projections have always been the gross figure with the charges taken off afterwards. So, a 7% projection wasnt 7% net of charges but 7% gross of charges. The drag has always been disclosed and has been a key comparison tool for decades.