IFA Costs for Transfer of Benefits

Tron1969

I have just received a Transfer value for transferring my defined benefits scheme to a defined contribution arrangement. I have to take impartial Financial advice as the transfer value is above £30k. Has anyone gone through this process, has anyone got any idea how much the impartial advice would cost for doing this?

Thanks

Silvertabby

You have to take specialist advice because transferring from a DB scheme to a DC scheme is nearly always a bad idea. That said, I see from your other posts that you may need cash now, so I'm guessing that is why you are looking at this option.

Is 1969 your date of birth? If so, that makes you well under the minium age 55 for accessing pension benefits (unless you are very seriously ill). Beware of anyone who tells you otherwise because they will be scammers.

dunstonh

£2500 to £10,000 is the typical range.

Tron1969

dunstonh wrote: »

£2500 to £10,000 is the typical range.

Wow really that much? I don't have that sort of free cash so I guess that would end the process straight away

Tron1969

Silvertabby wrote: »

You have to take specialist advice because transferring from a DB scheme to a DC scheme is nearly always a bad idea. That said, I see from your other posts that you may need cash now, so I'm guessing that is why you are looking at this option.

Is 1969 your date of birth? If so, that makes you well under the minium age 55 for accessing pension benefits (unless you are very seriously ill). Beware of anyone who tells you otherwise because they will be scammers.

I am under 55 and I am aware that you can't take any benefit until 55. The transfer value has increased substantially recently and was wanting to get all my old pensions into a SIPP but looking at the charges quoted below I don't have that sort of cash free so it may be a non starter

Silvertabby

“ £2500 to £10,000 is the typical range.
Originally posted by dunstonh ”
Wow really that much? I don't have that sort of free cash so I guess that would end the process straight away

The IFA has to cover his bum against your possible complaint in years to come, when you realise how much you have lost by giving up a DB pension.

Tron1969

Silvertabby wrote: »

The IFA has to cover his bum against your possible complaint in years to come, when you realise how much you have lost by giving up a DB pension.

I get that but upto £30k no advice needed over £30k it costs you a large percentage to move your own money.

zagfles

Tron1969 wrote: »

Wow really that much? I don't have that sort of free cash so I guess that would end the process straight away

They should be able to take the charge out of the pension. The charge is high because, like anything heavily regulated, if the advice was bad you could sue the IFA for a lot of money, so their indemnity insurance for this kind of thing is likely to be sky high. Especially for DB pension transfers which are generally conidered a bad idea unless proven otherwise. Basically you need to pay for their potential failure to do things right!

Tron1969

zagfles wrote: »

They should be able to take the charge out of the pension. The charge is high because, like anything heavily regulated, if the advice was bad you could sue the IFA for a lot of money, so their indemnity insurance for this kind of thing is likely to be sky high. Especially for DB pension transfers which are generally conidered a bad idea unless proven otherwise. Basically you need to pay for their potential failure to do things right!

How would they take the charge out of the pension? I have a transfer value from DB pension and I need IFA for my existing SIPP to be able to take the transfer value. If I can take this out of the pension that would be great

sandsy

zagfles wrote: »

They should be able to take the charge out of the pension.

Only if the transfer goes ahead to a product that allows charges to be taken from the pension.

But there's a huge chance that the advice will be not to recommend a transfer which then leaves the individual paying out of their own pocket if the adviser refuses to transact even though the individual wants to go ahead.

Silvertabby

“ The IFA has to cover his bum against your possible complaint in years to come, when you realise how much you have lost by giving up a DB pension.
Originally posted by Silvertabby ”
I get that but upto £30k no advice needed over £30k it costs you a large percentage to move your own money.

I can't speak for all DB pensions but, in the case of the LGPS, you can take pension benefits up to £30K as a one-off lump sum under triviality rules (subject to certain Ts & Cs). That's probably where the cut off £30K comes in.