Final Salary Pension advice

bostonerimus

maggie62 wrote: »

Hopefully, taking into account my health issues, the transfer will proceed smoothly, but at least I now know that there are some firms that will accept transfers against advice,

Have you actually been given the income and risk comparisons between the final salary pension and the CETV used for drawdown. Do those comparisons include all the fees? Maybe you could share those with us to get some other opinions. If you do go through with the transfer how will you invest for drawdown income and how much do you intend to withdraw and have as income....again after all fees have been taken off.

dunstonh

If I instruct the IFA to provide initial services and advice for his quoted fees of £1000, but then his partner firm advises against transferring out, I'd like to know what my options would be.

This suggests that the IFA themselves is not making the advice recommendation but using a third party. Where that is the case, the IFA wont be signing off on anything. The third party will.

If the transfer takes place then further fees take the total cost close to £6000 or approximately 2% of the CETV.

That is high. Especially in addition to the £1k paid. Possibly high as the third party needs paying as well. You can get better than that.

What is the difference in the "work" needed to transfer 600,000 compared to say , 300,000 ?

Work is similar when talking about those two figures. The biggest issue is size of liability. If a £30k case goes wrong, its probably under the excess and cost little to put right. A £600k case could be talking hundreds of thousands of pounds to put right. Larger amounts also tend to have more complex issues.

C_Mababejive

Can anyone confirm then that if an IFA has arranged a DB transfer and then charges 1% AMC, part of that 1% is for payment of some kind of indemnity policy which must be paid every year that the IFA is contracted to provide advice?

Clearly i am not qualified as an IFA. My expertise lies elsewhere but that does not preclude questioning of the system,charges and motivations.

dunstonh

Can anyone confirm then that if an IFA has arranged a DB transfer and then charges 1% AMC, part of that 1% is for payment of some kind of indemnity policy which must be paid every year that the IFA is contracted to provide advice?

Ongoing advice is optional and can be cancelled at any time.

Advisers are liable for the initial advice forever whether there is an ongoing service or not. IFAs do have to pay PI insurance every year and that does take into account past business but that has nothing to do with you being on an ongoing service or not. Like all expenses a business has, their total income goes towards their total expenditure.

DB transfers do push the price of PI insurance up and that price remains up every year thereafter as the liability never drops off. However, there is no explicit amount charged against your 1%.

iro

Just completed a transfer out of a DB scheme very happy!

capital0ne

maggie62 wrote: »

I have had a free initial meeting with an IFA who agrees that this is the best way forward

Well he/she would advise you transfer your FSP - it's a quick £1k for the IFA.

This is akin to getting a damp proofing company to survey your house for damp.

Or for a tarmac company to advise on the best solution for your driveway.

Or for a gas boiler engineer to suggest a heating system.

Be very careful what you do and get at least three IFA's to advise, and maybe a tax consultant.

This is going to be the biggest financial decision you're ever likely to make in your lifetime.

Linton

The IFA would make the same charge for the advice whatever it was and would be liable for the rest of his/her life for it being appropriate. The liability applies whether the advice is to transfer or not. Very different from a damp proofing salesman. Getting advice from 3 IFAs is just silly and very expensive.

dunstonh

Well he/she would advise you transfer your FSP - it's a quick £1k for the IFA.

Quick? Hardly.

This is akin to getting a damp proofing company to survey your house for damp.

Rubbish. The IFA charges for the advice. The outcome doesnt change the advice charge.

Be very careful what you do and get at least three IFA's to advise, and maybe a tax consultant.

How would a tax consultant (whatever one of those is) help in this scenario?

Getting advice from 3 IFAs means 3 lots of fees.

maggie62

Just a quick update.

The transfer was finally completed last week, after taking much longer than I'd hoped, but the wait was worth it. The original CETV expired so I had to request and pay for a new one, only to find that the value had actually increased by almost £13k.

kidmugsy

maggie62 wrote: »

Just a quick update.

The transfer was finally completed last week

Good for you for reporting back. Few have the courtesy to do that.