We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

True Potential - good idea or not?

Hi,

I went to see an advisor today from True Potential on my final salary pension. He is going to get a transfer value from my pension administrators (This is a BT pension - section B) by way of exploring that as one possible option.

Apparently the costs of going with them if I were to move my pension fund to their platform is as follows....

A one off transfer advice fee probably capped at £5000
Using their balanced portfolio would be ongoing costs of 0.81% per annum
Platform costs of 0.4% per annum
On going advice costs of 0.5% per annum

My pension value is going to be in the region of £1m plus.

Having not ever had dealings with an financial Advisor before I’m just getting opinions on these costs? I’m aiming to see a full IFA advisor (the one from True Potential is restricted) as well in next couple of weeks.

Opinions welcome.

Thanks...
«1345

Comments

  • Albermarle
    Albermarle Posts: 28,772 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    There are many other threads on this subject on this forum.
    The obvious question is not the level of costs ( which look reasonably normal ) but why are you looking to give up a guaranteed monthly payment for your retirement and throw yourself to the uncertainties of the financial markets .Be ready for some sleepless nights !
    Of course a Million Pounds seems a lot of money but what actual level of final salary payment are you thinking of giving up ?
  • Dox
    Dox Posts: 3,116 Forumite
    1,000 Posts Third Anniversary Name Dropper
    Hi,

    I went to see an advisor today from True Potential on my final salary pension. He is going to get a transfer value from my pension administrators (This is a BT pension - section B) by way of exploring that as one possible option.
    I’m aiming to see a full IFA advisor (the one from True Potential is restricted) as well in next couple of weeks.

    Opinions welcome.

    Thanks...

    Do you realise how tight the timescale is from getting a transfer value to taking a decision? The amount of ground an IFA has to cover is considerable - and 3 months is barely enough to do the job properly. Suggest you ask TP to hold off getting the transfer value until you've made a decision on who is going to advise you - and they can then apply on your behalf.
  • Dox wrote: »
    Do you realise how tight the timescale is from getting a transfer value to taking a decision? The amount of ground an IFA has to cover is considerable - and 3 months is barely enough to do the job properly. Suggest you ask TP to hold off getting the transfer value until you've made a decision on who is going to advise you - and they can then apply on your behalf.

    And you might only get one CETV free a year, after which a fee can be charged.
    Not an expert, but like pensions, tax questions and giving guidance. There is no substitute for tailored financial advice.
  • Hi,

    Thanks for your responses. The value of pension being given up will be in the region of £30k.

    With regard to the tight timescale... if I get a transfer value now (which is going to take a few weeks anyway) I presume any IFA can advise on that valuation so don’t quite understand why I can’t just let them get the valuation done at this stage while I get the right adviser if indeed it’s not them.

    I understand a further valuation would be chargeable (apparently £150) so I guess I can just take that hit if required.

    Thanks...
  • Also - As to why I would give up that level of benefit....

    I also think there are good benefits in doing it - such as inheritance, flexibility on income, removal of danger of company going bust etc.

    I’m not saying that I will do it just yet but I do feel I need to explore the option at least. My family history does not suggest I will live a very long life so I feel it may be a risk worth taking f the terms are good.

    Thanks...
  • beamyup
    beamyup Posts: 150 Forumite
    edited 24 April 2019 at 4:48PM
    £30k per annum pension = worth > £1M?
    Does it have good benefits on top of the £30K? is it available at an early retirement age?

    If you did go ahead with a transfer (see comments above on that)

    That is a HUGE fee for the IFA!
    (And I assume if the pension stays where it it - that's probably 0 fee for the IFA.)

    For the IFA - £5000 initial fee plus at least £5000 per annum until you run out of money or die!
    Maybe more than that if your fund grows.

    Plus very high platform and fund costs of at least £12,000 per annum.

    I don't know why the IFA thinks you should pay ANYTHING LIKE that %age for the platform and fund fees.

    Over 10 years that's £170,000 of fees! and that doesn't include the effect of what happens if the fund value rises!

    Personally, if I was to go ahead with the transfer I would be looking to decimate those fees and costs (this is MSE after all).
  • beamyup wrote: »
    If you did go ahead (see comments above on that)

    That is a HUGE fee for the IFA!
    (And I assume if the pension stays where it it - that's probably 0 fee for the IFA.)

    For the IFA - £5000 initial fee plus at least £5000 per annum until you run out of money or die!
    Maybe more than that if your fund grows.

    Plus very high platform and fund costs of at least £12,000 per annum.

    I don't know why the IFA thinks you should pay ANYTHING LIKE that %age for the platform and fund fees.

    Over 10 years that's £170,000 of fees! and that doesn't include the effect of what happens if the fund value rises!

    Personally, if I was to go ahead with the transfer I would be looking to decimate those fees and costs (this is MSE after all).

    If anything, I think its pretty low. The PI cover would be very expensive.
    Not an expert, but like pensions, tax questions and giving guidance. There is no substitute for tailored financial advice.
  • beamyup
    beamyup Posts: 150 Forumite
    If anything, I think its pretty low. The PI cover would be very expensive.

    The initial £5K seems "fine" - but that's the only thing - not the ongoing or fund costs.
  • He said the normal initial fee is 3% but on such a large fund they would cap to £5000.

    On reflection I agree the fees do look high to me - but I’m not knowledgable about the work level and risk that they are taking. I probably won’t take the risk but I’m still going to investigate.

    The other benefits are that it’s index linked (CPI) and 50% spouse pension - she is 6 years younger than me. It would be payable when I want to take it as I’m 58 anyway.

    Thanks...
  • Albermarle
    Albermarle Posts: 28,772 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    You can turn this on it's head and find an annuity checker on google.
    Put in your age , what income you want ( £30K) , that you want it to increase by CPI and a 50% spouse pension . You might be surprised by the amount of money they would want to set up an annuity on those terms . probably at least £1 million …..
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.9K Banking & Borrowing
  • 253.5K Reduce Debt & Boost Income
  • 454.1K Spending & Discounts
  • 244.9K Work, Benefits & Business
  • 600.5K Mortgages, Homes & Bills
  • 177.4K Life & Family
  • 258.7K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.