Defined Benefit Transfer Costs

freddymoney

I am thinking of moving my defined benefits pension to another pension pot.
As per the FCA rules, the current pension provider needs to see evidence of financial advice.
Most IFA's I speak to combine the advice and the transfer cost together.
There is nothing on the FCA website about transfers being mandatory IFA task.
I am being quoted 3% of my pot £9,000.00 in fees for advice and transfer
This seems excessive.

Can I just pay for advice and transfer it myself?

J

dunstonh

Most IFA's I speak to combine the advice and the transfer cost together.

That is because most clients want it that way. Plus it avoids VAT.

I am being quoted 3% of my pot £9,000.00 in fees for advice and transfer
This seems excessive.

£9000 is a bit excessive. Anything upto £5k is probably more in the ballpark.

Can I just pay for advice and transfer it myself?

You can. You may not get the advice any cheaper and IFA products, excluding the cost of advice, are often cheaper than many of the DIY products. Plus, as the IFA will not be acting as an intermediary, there should be VAT on it.

Given your other questions on the four threads you have created, are you sure you are upto doing it yourself?

aphill24

A fellow workmate is paying 18k on a pot with a CETV of 750k. There is also an ongoing cost of 0.4% to manage the fund. I am not condoning this amount just stating a fact.

Money_Help

9k in fees is definitely excessive and there should definitely be separate charges for the work involved in analysing whether a transfer is appropriate and then if it is to facilitate the transfer itself. Anything else and there is a really danger the advice will be biased. It shouldn't be a given that a transfer is best advice.

freddymoney

I spoke with Aviva and they said they are OK with me moving the DB pension to another provider providing the other provider also agrees and I have the letter from an IFA. However, I think I will struggle to get an IFA who just wants to give me advice, almost all I spoke with so far are insistent on making the transfer. What really annoys me is that all of the IFA's we spoke to 3 years ago all said under no circumstances cash in your DB scheme. Now there is a cash cow on the horizon they are giving conflicting advice. I am thinking that retaining the DB scheme isn't a bad idea, after all, I'll start another thread on the benefits (if any) of transferring a DB scheme. Thanks

unkle

I got advice only, from an IFA, was about £1500.

freddymoney

That's good to know, can you provide a reference / contact?

unkle

Sure:

http://www.somervillefs.co.uk

HappyHarry

freddymoney wrote: »

I spoke with Aviva and they said they are OK with me moving the DB pension to another provider providing the other provider also agrees and I have the letter from an IFA. However, I think I will struggle to get an IFA who just wants to give me advice, almost all I spoke with so far are insistent on making the transfer. What really annoys me is that all of the IFA's we spoke to 3 years ago all said under no circumstances cash in your DB scheme. Now there is a cash cow on the horizon they are giving conflicting advice. I am thinking that retaining the DB scheme isn't a bad idea, after all, I'll start another thread on the benefits (if any) of transferring a DB scheme. Thanks

Three years ago CETVs were much lower, and the new pension flexibilities were not available. It makes sense that advice should change to reflect changing external circumstances and legislation

dunstonh

What really annoys me is that all of the IFA's we spoke to 3 years ago all said under no circumstances cash in your DB scheme.

Why should that annoy you. If I turn on my tap, I am not annoyed that the water wasnt pouring before I turned the tap on.

In the last 30 years, there have only been around 3 or 4 where it was likely viableto transfer. As HappyHarry says, the changes in 2015 accelerated it a little.

Things change constantly. In a couple of years, this limited window could be over. It could be over in months or it may be another decade. This may be the new norm.

freddymoney

It annoys me because I am being quoted what I consider to be an excessive amount for what I perceive to be a paper shuffling exercise, they all claim a transfer is an excessive amount of paperwork but all of them refuse to break it down into days/hours. Some even claim it is mandated by the FCA, I spoke with the FCA and they signposted me to the terms of engagement for pensione transfers. FCA's are only required to give financial advice it does not mandate they that have to manage the transfer.