IFA fees, is 3% OK?

PeacefulWaters

bigfreddiel wrote: »

If you think 3% is too high negotiate for what you think you should pay

Now the pot size is irrevalent, 3% is 3%, so relative to the pot it's the same.

Say for example you were buying an investment trust that was trading at a 3% discount, you wouldn't expect the discount to decrease the bigger the purchase would you.

Ditto if you bought a car and the dealer offered you a discount you wouldn't expect it to taper with price would you? If the offer was 3% then you would expect 3% on the full price.

So if you don't like it negotiate a lower percentage, most IFAs are quite pragmatic and will be happy to discuss their fee. Good luck fj

The bigger the pot, the higher the IFA's liability.

So not totally irrelevant.

soulsaver

DB cash equivalent transfer (cetv) needs pension specialist qualified IFA - presumably your man is? Or he's going to be using a third party and probably sharing fees.

3%... You can do a lot better than that. Cancel your man & tell him you're going to look for alternate quotes to ensure you're getting value for money, he may come down to the numbers below...

I recently transferred my DB £300k+ cash equiv, and got several quotes (more than one) at c.£2.5k with no ongoing charges from FCA pension specialist qualified IFAs .

I got quotes through 'Bark' https://www.bark.com

and

'Unbiased' https://www.unbiased.co.uk/adviser-enquiry?utm_source=bing&utm_medium=cpc&utm_campaign=Brand_Broad&utm_term=%2Bunbiased%20%2Bfinancial%20%2Badvisor&utm_content=Brand%20IFA%20-%20Broadfor

And/Or PM me & I'll tell you who I used.

bigadaj

Why not leave the db pension where it is?

C_Mababejive

Why is transferring a DB pension seen as high risk? Isnt this just an excuse for some IFA's to hike their fees? Surely customer engages IFA, IFA explains all the risks, customer indicates their full understanding and signs to validate his/her acceptance,transfer takes place, IFA gets fee.

Its surely all about personal responsibility so why is it high risk and therefore high fee for an IFA?

Advice is advice so what has the perceived risk got to do with it?

You might as well say,,a customer who has never ridden a motorbike in his life goes into a Suzuki dealer to buy a Hyabusa (top speed around 190mph). Dealer says ,as you have never ridden a motorbike before i shall have to charge you double the list price as the transcation is more high risk.

ianthy

I am in the process of transferring £900k DB and spent nearly 2 weeks on the phone getting quotes from IFA's. Fees vary massively - the highest quote was £39k with a 'proposed' tie in for investment mgt. I decided to use an IFA that I have used in the past, offering £2k for the transfer and £4k investment advice inclu setting up SIPP and investments choices etc.,


Yes there has been some questions from their compliance team and completion of a risk profile and a requirement to explain how I plan to use the cash lump sum.


Of course, If the IFA is unhappy about the client he/she has the right to decline to biz. So why charge more for 'risk' why not just decline the biz?

dunstonh

Why is transferring a DB pension seen as high risk?

1 - Historically, most people that have done it have ended up worse off financially
2 - The FCA treat them as mis-sold unless proven otherwise
3 - The FOS uphold around 4 out of 5 complaints about them
4 - PI insurers charge more because of the increased risks

Isnt this just an excuse for some IFA's to hike their fees?

Don't need an excuse. It is just commercial reality that exists in all areas of business.

Surely customer engages IFA, IFA explains all the risks, customer indicates their full understanding and signs to validate his/her acceptance,transfer takes place, IFA gets fee.

The FOS disregards disclaimers signed. People complaining often say a lot of things that differ from what they said at the time of application.

Its surely all about personal responsibility so why is it high risk and therefore high fee for an IFA?

We live in the nanny state. Personal responsibility is rare nowadays.

You might as well say,,a customer who has never ridden a motorbike in his life goes into a Suzuki dealer to buy a Hyabusa (top speed around 190mph). Dealer says ,as you have never ridden a motorbike before i shall have to charge you double the list price as the transcation is more high risk.

The FCA and FOS are not available in those scenarios.

Of course, If the IFA is unhappy about the client he/she has the right to decline to biz. So why charge more for 'risk' why not just decline the biz?

Why do you think many put a high price on it? It acts as a passive blocker to some and if someone is willing to pay then the adviser at least gets paid well to do it. IFAs are not allowed to restrict. So, if their firm has the permissions, they have to do it. SO, for things they dont really want to do but are obliged to do, they put a high price on it.

bigadaj

C_Mababejive wrote: »

You might as well say,,a customer who has never ridden a motorbike in his life goes into a Suzuki dealer to buy a Hyabusa (top speed around 190mph). Dealer says ,as you have never ridden a motorbike before i shall have to charge you double the list price as the transcation is more high risk.

Not a great analogy.

A better one would be with the insurer for the bike, the premiums would obviously be higher.

RickyB2000

C_Mababejive wrote: »

Why is transferring a DB pension seen as high risk? Isnt this just an excuse for some IFA's to hike their fees? Surely customer engages IFA, IFA explains all the risks, customer indicates their full understanding and signs to validate his/her acceptance,transfer takes place, IFA gets fee.

Its surely all about personal responsibility so why is it high risk and therefore high fee for an IFA?

Advice is advice so what has the perceived risk got to do with it?

You might as well say,,a customer who has never ridden a motorbike in his life goes into a Suzuki dealer to buy a Hyabusa (top speed around 190mph). Dealer says ,as you have never ridden a motorbike before i shall have to charge you double the list price as the transcation is more high risk.

I assume that they would look for even the smallest loophole or technically that the IFA missed. Doesn't really matter if the client said they understood if later they can build a case around the wording the IFA used to state that a particular risk was not explained properly. They can only understand what is put in front of them and if something was missing or the wording not completely clear they can say that even though they understood, they could only understand what was in front of them at that time.
I think if the IFA is both advising and doing the transfer then they take on even greater risk - esp if they advice against and yet continue.

dunstonh

I assume that they would look for even the smallest loophole or technically that the IFA missed.

And anyone who saw that thread about a week ago in the savings and investments section will know that is exactly what some will do.