Openworks DB transfer svs

Mikevanman

Hi folks, I recently had a free meeting with what I thought was an IFA however it seems he is just a consultant and introduced the idea of using a company called Openwork to handle my two DB pensions worth £280k.
Will be 55 this month and it spurred me into seeking advice from Pension wise which was well worth a meeting.
My question is do financial consultants do a different job that a IFA does.
I just recieved an e mail from the financial consultant basically saying it will cost me £9,000 for the advice and implementation of the two DB pensions plus ongoing fees.
I already have an HL vantage SIPP and an Aviva designer pension and foolishly thought it would be straight forward to move my DB pots into one or both of these.

Brynsam

If you are considering transferring a DB pension worth more than £30,000 then there is now a legal requirement for you to seek advice (but not necessarily follow it) from a properly authorised financial adviser who is FCA regulated. You can check the status of any individual by looking at their register: https://register.fca.org.uk

This sort of advice is classed as regulated advice and it is a criminal offence for someone who is not regulated to purport to give such advice. This doesn't mean that you can't correspond with someone who is not regulated - but the actual advice will need to come from someone else within the same firm who is regulated. If the consultant with whom you are in touch isn't on the FCA register, ask who will be signing off the necessary forms to confirm you have received advice.

Get some quotes from elsewhere if you aren't entirely happy with this one - and it is always worth comparing costs.

Mikevanman

Checked him out Brynsam and seems he is FSA regulated. He did a risk profile and sent me results but it seems he wants to use a company called Openwork DB transfer advice service. I just wondered if there was a reason for this.
I think I will try and get a few quotes and compare them. I don't begrudge paying for advice but it just sounded quite high especially if he was farming the job out.

dunstonh

Hi folks, I recently had a free meeting with what I thought was an IFA however it seems he is just a consultant and introduced the idea of using a company called Openwork to handle my two DB pensions worth £280k.

Openwork is an network of FAs. They work to a relatively large panel but also have in-house investments.

My question is do financial consultants do a different job that a IFA does.

Consultant is marketing title. It has no regulatory meaning. Its usually used, along with other titles, to try and make you forget or even hide that the person is not an IFA. They are FAs.

FAs and IFAs work to the same rule book and have the same qualification requirements. However, an FA can have restrictions that prevent them from advising in certain areas or restrict how they can advise in certain areas AND are restricted on the products, investments and services they can use as solutions. The restrictions can be small. They can be extensive. I know an ex IFA who moved to Openwork as an IFA but was under continued pressure to restrict. And the greater the restriction the more they would pay him (as in using their platform and their funds).

Because FAs cost the same as IFAs the real choice for you is to either DIY or use an IFA. Using an FA should not come into it.

I already have an HL vantage SIPP and an Aviva designer pension and foolishly thought it would be straight forward to move my DB pots into one or both of these.

HL is expensive and Aviva designer pensions are a few generations out of date. An IFA can improve on costs with both of those, albeit with the advice charge. You can improve on both if you DIY well. An IFA wouldn't transfer into HL because it is too expensive.

Mikevanman

Thanks for the comments Dunstonh, I haven't looked at taking my 25% tax free cash yet but do you know if it's long process? And does it mean you have to leave the DB pensions alone once you've taken it.

dunstonh

I haven't looked at taking my 25% tax free cash yet but do you know if it's long process?

Anything from 30 minutes to 6 months depending on how much preparation is needed i.e. DB transfer to DC followed by immediate crystallisation could be looking at months. Whereas, crystallising a modern scheme with bank account validated and accepts online instructions and pays by CHAPS could be within the hour.

You will no longer be in the DB scheme if you have transferred to a DC scheme to get access to the 25%. If you viewed it very simply, its like transferring your current account from one bank to the other. The old one closes.

xylophone

What are your reasons for wanting to transfer out of your DB Schemes?

Mikevanman

Hi xylophone , I checked the pension benefits of both DB schemes and it basically at the moment when I'm 65 there worth about 10k a year between them. I have property and a collection of vintage motorcycles as well as some inheritance as my main pension. I suppose after my initial meeting with a financial advisor who told me it would be probably good idea to transfer them I thought I would give it some serious study. Have to admit like many people I didn't think the cost for advice would be 9k.
Also I don't have any dependants so thought the DB benefits wouldn't really help if I die prematurely.