Final Salary Transfer IFA fees/charges

jonbrydon

Hi

Apologies if this subject has been addressed before in this forum.

I am (aged 55) transferring a deferred pension from a final salary scheme to a drawdown scheme and the IFA which I have initially approached charges 3% (£7,500) for a fund of up to £250,000. Although this seems excessive, it does seem to be a fairly standard rate across IFAs - The Money Advice Service also told me that this seemed to be the going rate.
I found a London-based company called Tideway Investment Partners which produces excellent information (freely available on the internet) and which only charges 1% (£2,500).

Any advice on what charges I should expect to pay and any information on Tideway Investment Partners would be gratefully received.

dunstonh

Although this seems excessive, it does seem to be a fairly standard rate across IFAs

Not really. The FCA (when it was the FSA) did a review on charges and found 1.8% was the average. Lots of IFAs work on fixed free or have tiered percentage charges if you choose that option.

CFrog

I used the map search function on the unbiased.co.uk web site to help in my search for an IFA. The web site helped me identify IFAs that worked in pension transfers market space but it doesn't differentiate between the types of pension transfers they will consider; it doesn't single out working on final salary / DB pension transfers. I probably contacted about 10 -12 IFAs and out of those only 3 were willing to provide me with some indication of fees.

The IFAs who did provide quotes broke them down into 2 parts; a fixed fee for evaluating your DB pension to produce a TVAS report and a variable fee based upon a % of the CETV. The latter would only be incurred if the pension was transferred.

Fees were typically £750 - £1000 +VAT (for the TVAS) plus 1-2% of the CETV (no VAT).

I did look at Tideways web site but didn't speak to them.

Hope this helps.

jonbrydon

Thanks for the prompt responses dunstonh and CFrog.

dunstonh : 'The FCA (when it was the FSA) did a review on charges and found 1.8% was the average'....
The FSA was replaced by The FCA in April 2013 (almost 4 years ago) so the average will probably have increased, especially in the current climate in which CETVs are relatively high.

Thanks again to both of you - I will be undertaking a bit more research.

dunstonh

dunstonh : 'The FCA (when it was the FSA) did a review on charges and found 1.8% was the average'....
The FSA was replaced by The FCA in April 2013 (almost 4 years ago) so the average will probably have increased, especially in the current climate in which CETVs are relatively high.

Actually, it is likely to have gone down. RDR has been successful in lowering initial charges on the whole. And most decent firms taper the percentage charge and have a cap so it cannot exceed a certain amount.

jonbrydon

dunstonh wrote: »

Actually, it is likely to have gone down. RDR has been successful in lowering initial charges on the whole. And most decent firms taper the percentage charge and have a cap so it cannot exceed a certain amount.

Thanks dunstonh - I'm a little unsure about this whole process but am searching for alternative firms and quotes.

sandsy

The advice charges levied for pension transfers can't be compared with those for normal investment advice.

Advising on a pension transfer is a different activity, considered high risk and involves a level of specialism by the adviser. It also carries a higher risk of the advice being found at fault and, consequently, higher professional indemnity insurance costs for the adviser.

So all in all, the charges for advice for pension transfers are likely to exceed those for normal investment advice.

PeterBalham

I am 59 and was told my transfer value for a Ferannti a company I worked for 35 years ago is £33k

I wish to pt that into a SIPP the best quite I have had so far is £1,500 for the advice and the advisor seemed to imply that I would be able too transfer the amount as it will represent a very small amount of my income in retirement and the multiples uses now to calculate transfer values are high

Can anyone beet that? whether they are an IFA or not

Please answer here or via a direct message if you wish

CFrog

Peter, I think that just about fits with the figures I quoted in my previous post ie (say) £750 (+VAT) + (£33,000 x 0.02) = £1560.

soulsaver

PeterBalham wrote: »

I am 59 and was told my transfer value for a Ferannti a company I worked for 35 years ago is £33k

I wish to pt that into a SIPP the best quite I have had so far is £1,500 for the advice and the advisor seemed to imply that I would be able too transfer the amount as it will represent a very small amount of my income in retirement and the multiples uses now to calculate transfer values are high

Can anyone beet that? whether they are an IFA or not

Please answer here or via a direct message if you wish

Did you read the first OP? You could give it/them a try.

PeterBalham

Thanks for both of you getting back to me I think Tideaway charge a minimum of £2,000 when I read the info so the £1,500 quote I have does not look too bad.

I am surprised that for many IFS's they do not tell you what they charge on their internet site.

I have found another one I wll investigate on Monday only 2 miles from where I live they say they charge 1% all inclusive but I suspect there will be a cap

Thanks again for replying