Insistent Client charges

grey_gym_sock

Freecall wrote: »

Can you imagine any other service where simply not accepting advice means you have to hand over a wodge of cash.

it sounds a bit like quincy jones' role producing billie jean

Sure, the FA has to cover his back if you are doing something he considers stupid and that he could get stung for but this should be in the form of you absolving him of responsibility not him trousering a fistful of cash.

you can't completely absolve him. that's not how the rules work.

however, as has been said, it may be that the nature of the fee has been miscommunicated in this case.

sandsy

What fees did he quote you for advice before he did the transfer value analysis? Undertaking a transfer value analysis is not trivial and is high risk, no matter whether the advice is to transfer or stay put.

The fees should have been disclosed and agreed before you asked him to proceed, including the cost if you decided to proceed against his advice.

magpiecottage

I will make two points.

The first is that the transfer is high risk. I have seen FOS say that an adviser should have refused the business altogether in circumstances such as this.

Therefore a wise adviser will either factor in the risk and charge accordingly. The time cost and FOS fee for a case like this could easily exceed £1,500.

It is also quite possible that the adviser is deliberately trying to price himself out of the market because he sees it as too risky.

If you do not like his original advice you can always go to another adviser who is foolish enough to give you what you want and then face a complaint from you later.

It sounds like your current adviser has his head screwed on. Stay with them and follow their recommendation rather than pursuing your own folly.

dunstonh

I agree with the adviser position on this. It is one of common sense and reflects the increased risk. Although maybe the safer thing to do would be to refuse to do it.

still fully employed and do not intend to retire immediately

Current hot potato. Regulator is not keen on people taking retirement income prior to retirement. It can be justified but it requires more work and more risk for the adviser.

I have a SIPP in drawdown

Regulator considers SIPPs higher risk than personal pensions and drawdown is considered higher risk than annuity purchase. So, two more negatives in your case. Plus, you are having problems with affordability now. So, what is it going to be like in retirement when your income drops?

Charging £1500 for transferring £33000 seems a lot to me.

Actually, it seems quite cheap for putting a plan into a SIPP to drawdown. As others have said, the fee is probably the published charge for the transaction. Whether it is £33,000 or £333,000, the fee is likely to be the same or similar (not uncommon to discount if there is an existing relationship or other business).

Can you imagine any other service where simply not accepting advice means you have to hand over a wodge of cash.

Yes. Solicitors, accountants, builders and probably most other professions. The charge is for the advice. Not the product. The advice has been given. The fact the advice is being ignored doesn't mean there has been no work down. Plus, there is liability for the advice. "Do nothing" for example is advice. So, an adviser recommending someone does nothing to change anything carries a liability.

The regulator doesnt allow advisers to do things that they believe are wrong on the basis of execution only. Insistent basis requires more work. For example, two suitability reports is not uncommon. One saying that the advice is not to do the transaction. Then a gap with a second saying that the advice has been overruled. Higher risk transactions are allowed to be charged more than lower risk ones. Just as in any walk of life.

Freecall

dunstonh wrote: »

Yes. Solicitors, accountants, builders and probably most other professions. The charge is for the advice. Not the product. The advice has been given. The fact the advice is being ignored doesn't mean there has been no work down.

Nobody is questioning the right to be paid for advice, the original post read to me as if this was incremental (ie. in addition to the fee paid for the advice) and we asked the OP to clarify.

As they have not done so we do not know - possibly as a newbie with only 2 posts we never will.




Welcome back BTW.

Davejames_2

Hi

I have a small deferred final salary - worth just over £30,000 which I am looking to use the cash to pay off a similar amount of debt and am looking for any Financial Advisors who are willing to deal with me on an 'Insistent Client' basis. I haven't any idea as to where to start on this and would be grateful if anyone has used or kows of any to enable me to carry out this transfer.

Thankyou.

dunstonh

and am looking for any Financial Advisors who are willing to deal with me on an 'Insistent Client' basis.

Good luck with that. There are some out there that will but you will need to search long and hard. IFAs are being encouraged from all corners to not transact insistent clients in this area until better clarification comes from the FOS and FCA. Some will ignore the warnings and they are the ones you need to find.

atush

It seems like, people who want to do things with their pension pot, that might not be a good idea are unhappy to pay the fees for doing so?

If you do things with your pot that are not a great idea, this means you could in future sue your IFA because you are a great, Giant, Numpty.

Which means he has to pay a great giant numpty premium to cover this risk. So charges accordingly?

kidmugsy

If the OP doesn't like the price, shouldn't he just shop around? He might find an IFA in rotten health who is prepared to take the gamble.

dunstonh

atush wrote: »

It seems like, people who want to do things with their pension pot, that might not be a good idea are unhappy to pay the fees for doing so?

If you do things with your pot that are not a great idea, this means you could in future sue your IFA because you are a great, Giant, Numpty.

Which means he has to pay a great giant numpty premium to cover this risk. So charges accordingly?

Effectively yes.

The problem is that the FOS have a history of saying that people that dont understand a subject are not in a position to sign disclaimers saying that they understand its not right but want to do it anyway. So, it ignores the disclaimer signed and looks at suitability. The FCA have come out with clarification recently but advisers are waiting for the FOS and insurers and the trade bodies as well as compliance companies are saying dont risk it.

However, there will be advisers willing to take the risks and others that will not (its like all forms of risk).