Low cost IFA for DB to SIPP pension transfer?

CSMR

I am transferring a pension from DB to a SIPP because I would like to invest it myself.

The transfer value is £78,000. Since this is more than £30,000, I need "evidence of advice, signed by an advisor on the FCA register" to proceed.

I was expecting to pay about £250 for about an hour's work but instead I've been given offers of 2.5-3% of total value or about £2000 which is much more than I was expecting. The IFA I spoke to said the advice would take more than a day's work, which also was much more than expected as the relevant information can be summarized in a few lines and the calculations are very simple.

Is there anywhere I can find an IFA who can offer the minimum legally required advice at a reasonable cost? Even up to £1000 would look OK to me now.

(I am not complaining about IFAs because their normal job is to offer advice to people who need to decide what to do and a very personalized service is expensive. I only need the advice for compliance reasons and the quality or effort is not important to me, or even whether the advice is yes or no.)

Thanks!

dunstonh

I was expecting to pay about £250 for about an hour's work

ROFL. An hours work and just £250.

but instead I've been given offers of 2.5-3% of total value or about £2000 which is much more than I was expecting.

£2000 is good. Figures of £5000 are closer to the norm.

I only need the advice for compliance reasons and the quality or effort is not important to me, or even whether the advice is yes or no.)

It is important to the adviser though.

AnotherJoe

The issue is not so much the work, but the liability insurance the FA needs to be able to pay for when in ten years time you come back complaining the advice was bad and you want compo.

There's even a case where someone advised not to transfer, the person transferred and they still got compo for the advice not being strong enough not to transfer ! So some IFAs simply wont even touch these cases now especially as people like you want it done for peanuts which isn't worth the risk to them.

Which might also give you cause to ponder as to whether this is a wise thing to do.

tacpot12

I paid £1000 for a report on whether to transfer 2 x DB pensions. The IFA was happy to do it for this fixed fee on the basis I would do all the transfer work myself. Their recommendation was to leave the pensions where they were. By coincidence the total transfer value of these two pensions was £70k, the pension benefit payable was about £2200 per annum in today's money.

The IFA was based in Sheffield.

Kendall80

I'm in a similar situation to the OP. Its not the 'advice' I require but rather a sign-off to say i've consulted with an IFA. I've already weighed up the pros and cons of the transfer myself.


I understand there is a liability issue for the IFA as stated above. Maybe there is a template/procedure they have to adhere to. I don't suppose there is some kind of waiver I could sign to take on full responsibilty for the transfer? My CETV is only 3k above the 30k threshold too.


EDIT: If advice is obtained and is 'against' the transfer then does the IFA take on no liability? Presumably one can go ahead with the transfer.

Linton

tacpot12 wrote: »

I paid £1000 for a report on whether to transfer 2 x DB pensions. The IFA was happy to do it for this fixed fee on the basis I would do all the transfer work myself. Their recommendation was to leave the pensions where they were. By coincidence the total transfer value of these two pensions was £70k, the pension benefit payable was about £2200 per annum in today's money.

The IFA was based in Sheffield.

Did you accept the IFAs recommendation or try to transfer anyway?

dunstonh

'm in a similar situation to the OP. Its not the 'advice' I require but rather a sign-off to say i've consulted with an IFA. I've already weighed up the pros and cons of the transfer myself.

The "sign off" by the IFA means that they take liability for giving you advice. They cant just sign it and do nothing other than that.

understand there is a liability issue for the IFA as stated above. Maybe there is a template/procedure they have to adhere to. I don't suppose there is some kind of waiver I could sign to take on full responsibilty for the transfer? My CETV is only 3k above the 30k threshold too.

The FOS does not recognise waivers signed by people. It takes the view that the average consumer is not in a position to know what is right for them in complex areas and therefore not able to waive their rights.

EDIT: If advice is obtained and is 'against' the transfer then does the IFA take on no liability? Presumably one can go ahead with the transfer.

The IFA has liability for the advice. If you go against the advice, that is your choice and in theory, the IFA should not suffer the consequences. However, there was an FOS outcome against an adviser earlier in the year where they recommended it was not transferred but the FOS felt they do not make the reasons against strong enough.

Most compliance firms position it with advisers that if a complaint goes to the FOS over a defined benefit transfer, they will nearly always uphold the complaint.

sandsy

Kendall80 wrote: »

I'm in a similar situation to the OP. Its not the 'advice' I require but rather a sign-off to say i've consulted with an IFA. I've already weighed up the pros and cons of the transfer myself.

Whether you think you need advice or not, you are required by law to take advice. Chances are that unless you're an adviser yourself, or at least read up widely on pension transfers, you've probably missed some of the pros and cons. What critical yield did you come up with?

Kendall80 wrote: »

I understand there is a liability issue for the IFA as stated above. Maybe there is a template/procedure they have to adhere to. I don't suppose there is some kind of waiver I could sign to take on full responsibilty for the transfer? My CETV is only 3k above the 30k threshold too.

Nope, waivers don't count. Adviser still has liability for the advice.

Kendall80 wrote: »

EDIT: If advice is obtained and is 'against' the transfer then does the IFA take on no liability? Presumably one can go ahead with the transfer.

Adviser carries liability for the advice no matter what the advice is. For a limited number of people, it might be better to transfer and if the advice is not to transfer then it would be poor advice.

Linton

Kendall80 wrote: »

.....

EDIT: If advice is obtained and is 'against' the transfer then does the IFA take on no liability? Presumably one can go ahead with the transfer.

As long as your chosen new provider is prepared to accept you on that basis.

Silvertabby

dunstonh and sandsy are right - reputable IFAs just won't take the risk of being sued when clients have spent all of their 'easy access' pension funds and are facing retirement without their final salary pension income.

I'm a retired LGPS administrator, and dealt with a lot of transfer out applications (from current members and well as deferred members) when the pension freedoms were announced. Some pension fund members tried more than one IFA (I think the record was 4) before finding one who would 'recommend' the transfer.

People don't read the small print - they just see £ signs and pick up the pen.

A little off track, but I have bad memories of a case a few years ago when I had to tell a just widowed lady that the LGPS wouldn't be paying her the widow's pension she had expected and was banking on. Her husband had transferred his LGPS benefits into a private pension scheme so he could take the lump sum and an annuity at 50 (LGPS minimum age was 60). It seems that when he received his annuity offer, he just looked at the highest pension - ie, the one without widow's benefits. According to his poor wife, he told her that as his private pension wouldn't go to her, that must mean that her widow's pension hadn't been transferred and so she would have to claim it from the LGPS when he died.

CSMR

tacpot12 wrote: »

I paid £1000 for a report on whether to transfer 2 x DB pensions. The IFA was happy to do it for this fixed fee on the basis I would do all the transfer work myself. Their recommendation was to leave the pensions where they were. By coincidence the total transfer value of these two pensions was £70k, the pension benefit payable was about £2200 per annum in today's money.

The IFA was based in Sheffield.

I've managed to find someone now at a similar price on bark.com.

My pension is about £4500 but only the same value as yours. Because I'm 30yrs from retirement. Young people get a bad deal in DB/DC pensions, same contributions but the benefits are further in the future so lower value. Probably a good strategy to go with an SIPP pension when a long way from retirement and DB pension later.

The valuations seem pretty generous for all of us though, based on low interest rates.