Cost of advice for transferring out of a DB scheme

pensionsnewbie

Appreciate there is a lot of work involved in the transfer process but does a £6,000 adviser fee sound reasonable on a pension with a transfer value of £580k?

Thank you

mgdavid

probably 'yes' if you think about the cost of professional indemnity insurance in case the adviser is sued later for bad advice and a mis-sale.

Did you not think you had all the answers to this in your thread of last November?

https://forums.moneysavingexpert.com/discussion/5106842

pensionsnewbie

Thank you mg - the numbers had changed which is why I wanted a sense-check.

dunstonh

Given the high risk nature of the advice transaction and the statistical likeliness of it being bad advice (or later being ruled as bad advice), the fee on this sort of transaction is usually higher.

These transactions are under high scrutiny and get reported to the FCA each year. The actual paperwork for the application process is not much. The cost of analysis and time is a little more than normal but the big cost is the liability and the fact that adviser is required to have higher qualifications to carry out the transaction.

davide691

Seems high to me. I paid just under 1k. Transfer value was lower, but I doubt the amount of “work" was

greenglide

davide691 wrote: »

Seems high to me. I paid just under 1k. Transfer value was lower, but I doubt the amount of “work" was

For a transfer from a Defined Benefit scheme to a DC scheme?

The cost of the insurance cover makes a huge difference. Taking the risk on over £500k will be expensive!

davide691

@greenglide - OP’s transfer value around twice mine, but he/she’s paying 6 times more for his/her advice. Go figure

dunstonh

davide691 wrote: »

Seems high to me. I paid just under 1k. Transfer value was lower, but I doubt the amount of “work" was

Madness for an adviser doing a defined benefit pension transfer for just £1000. Does not make any commercial sense. If it was a money purchase transfer then that is more like it but not defined benefit

atush

I think 6K in nearly 600K is cheap. And I think the adviser who did over 200K for only 1K was an idiot.

bmm78

I really don't understand why an adviser/firm would go to the trouble and expense of obtaining the required qualification, apply to the regulator for the necessary permissions (with the increased scrutiny that brings), pay a higher PI premium as long as the case remains on the books (ie forever), make a recommendation that FOS default as a mis-sale unless proven otherwise, and then charge less than £1,000 for it in a market with restricted supply of advisers where the going rate is significantly higher.

It just doesn't stack up.

agarnett

Of course it stacks up. There are those who are set up to assist customers, and those who say they are and that they know best, but aren't, and don't.

In the same way no two IFAs are the same and no two Pension Transfer Specialists are the same, there are those who are competive, and there are those that scream blue murder because they can't compete and even some who are trying to spoil the market against discerning customer's interests.