Sipp

Thrugelmir

jamesd wrote: »

Sometimes an IFA will prefer to decline business by quoting a fee that the client won't accept.

Then I would expect them to decline the business in a more professional manner than quote such an outrageous fee. People should be expect to be treated in the proper manner when they approach for advice. IFA's such as this are no better than the bank staff who sold PPI. Or mortgage brokers who sold liars loans. As their sole aim was to better themselves at the expense of others.

mania112

jamesd wrote: »

Sometimes an IFA will prefer to decline business by quoting a fee that the client won't accept. Other times some may take the view that the client really wants something even if it's a bad idea and quote the fee they would want for doing that, allowing for their risks of doing it anyway.

Maybe, but I don't think that's the case here.

The adviser (maybe not even an IFA, who knows) has recommended a transfer to a SIPP and quoted £13k to do it.

No hint that he's told the client not to do it.

If he thought the client was sick and may not see longevity in retirement, I don't see how charging OTT is justified, seeing as there could be a legitimate reason to transfer.

It's true that making a transfer from DB to DC is a big risk to the firm. We can therefore expect to charge clients more than a straightforward DC to DC transfer, but not as much as this.

RDR has failed to address the disparity of fees (although it didn't explicitly set out to do so, unfortunately). There's no clear answer, not one I can see. But there must be a way to ensure clients aren't ripped off.

jamesd

I'm inclined to agree. I don't really think that it was misunderstanding of the life expectancy of diabetics either. But I don't actually know.

bigadaj

There is a distinction her between retail offerings and business to business dealings. It's very common in the latter case for people to quote large sums when they are too busy, to decline the works or generate enough to resource the project and make good money, it's certainly common in the construction projects I've managed, just a Convention that it's acceptable to put ina. Silly price rather than just honestly say one is too busy.

To quote excessive fees in retail is tying to prey on the ignorance of the consumer on a one off transactional basis and should be absolutely condemned. It's indicative of a totally unprofessional approach, but in this case I wonder of it's even intentional, the 3% and 1% is quoted so often it could conceivably be stated in ignorance almost.

mania112

I had not considered that some Advisers might quote extortionate fees to either deter the client or because they're too busy.

I'm fairly new to the industry, or to the advice side of it at least, so I will accept that it might be the case (and i've not had the luxury of being too busy to take on business yet, another reason why this sort of thing is starting to grind on me a bit).

3% is an acceptable standard. But it needs to be flexible enough to recognise when the monetary value of 3% becomes too high or too low. We do have our own fee's to pay which invariably increase with success.

It's difficult. Clients are happier paying from the transfer and Advice would be buried if this wasn't possible. So due to the varying size of pension pots, some will pay more for the same quality of service as others with less in their kitty.

Personally, I try to level it across the board with min and max fee's (which aren't prescribed by the firm i represent and so is done ad-hoc and would be different if you spoke to one of my colleagues).

Until such time as we're paid by providers or the regulator, there's never going to be a decent solution, other than being recommended a decent IFA via WoM.

Fleming

Thanks for the explanation Jamesd. The issue with the first financial advisor was he wasn't Independent. He takes 1.5 per cent and Capital income solutions take 2.5 per cent. This is where the 4 per cent came from resulting in costs of 13k. Then 0.5 per cent yearly to the company where the money would be invested. However, we will go with the advice of the new IFA as your advice and that of others in the forum that to stay with the university pension scheme is in our best interest.

Thrugelmir

bigadaj wrote: »

What a unique ifa!

I suspect there's plenty more of the same breed. Probably were mortgage brokers in an earlier career. Before that Everest double glazing salesmen.

Always one step ahead of the regulators.

Fleming

Thrugelmir, that is interesting that you said that as the first financial advisor normally deals with mortgages.

Thrugelmir

Fleming wrote: »

Thrugelmir, that is interesting that you said that as the first financial advisor normally deals with mortgages.

I recall the days of Allied Dunbar ( we used to call them Allied Crowbar). As anybody with any financial sense could see the complete rip off charging structure without the need to do any calculations. Yet for many years they touted successfully for business through networking at the golf club or Chamber of Commerce.

Every generation produces the same old tricks repackaged to operate within the regulations. Maximising income while the goings good.

mania112

You can't stereotype something like this but you might well be more wary of an older adviser who was brought up during a time when mis-selling was rife.

The man from the Pru earnt more commission for selling you a new pension than asking you to contribute to your existing one.

Now, a high percentage of older IFAs used to work for the Pru.