IFA Fees

NeilC1965

Hi,
I'm in the middle of having an IFA look at a db transfer with fees for this at around £9k should it go ahead(£700k db transfer value)

I already have some other funds in a Collective Retirement Account fund with OMW and a further dc pot with L&G. The plan is to bring all of these together into one managed fund , handled by the IFA with a total value of around £930k.
Is it normal to charge a further £3k to transfer the remaining £230k across?It is only a paperwork exercise which I could do myself.

One transferred across , there would of course be the normal fees for managing the combined funds , which I have no issue with the IFA charging.
Is this normal practice to charge so much for so little effort on the OMW transfer?

Aegis

It is indeed normal to charge for each transaction, however you can offer to simply do the transfer yourself to save the fee. The adviser may well be happy at not having to do the extra work!

Linton

Is the £3K just for transferring the DC pensions over as cash which should be a trivial exercise, or does it include the difference between setting up an investment portfolio of £930K vs £700K? And presumably his advice report would have to be expanded to include the justification for moving the DC pensions.

[Deleted User]

Given the transfer fees and particularly subsequent lifetime IFA management fee, the money should be kept in the DB pension barring extreme circumstances. Even without such costs, in most cases it’s the best option for investors.

beamyup

Why do you want to transfer DB scheme? do you have good reasons? if so get a quote from other IFAs.

What annual charges is the IFA after as well as the upfront? what do you mean by "normal fees"? is the IFA trying to lock you in to these either contractually or by choosing a platform that is "IFA only".

NeilC1965

Linton wrote: »

Is the £3K just for transferring the DC pensions over as cash which should be a trivial exercise, or does it include the difference between setting up an investment portfolio of £930K vs £700K? And presumably his advice report would have to be expanded to include the justification for moving the DC pensions.

My understanding is that the dc funds will be moved across to whatever funds are to be set-up by the db transfer, so a fairly trivial exercise to my understanding.

NeilC1965

beamyup wrote: »

Why do you want to transfer DB scheme? do you have good reasons?


That's why I'm having an IFA look at the options to see if it makes sense or not!

wjr4

It is not 'only a paperwork exercise' but an extra £3k is too much in my opinion. The £9k fee should cover all pension advice.

NeilC1965

Deleted_User wrote: »

Given the transfer fees and particularly subsequent lifetime IFA management fee, the money should be kept in the DB pension barring extreme circumstances. Even without such costs, in most cases it’s the best option for investors.

Surely you would need to do an in depth analysis of the CETV value versus the db pension to understand if it does make sense or not? The value of the db pension is not mentioned in the thread.....

beamyup

imho
1) "no transfer no fee" should not be allowed due to conflict of interest.
2) you should be able to get free/cheap suitability advice just by high level discussion of your circumstances.

SonOf

The 3k for a DC to DC transfer is greedy. Getting out of OMW is very easy to justify as it uses UT/OEIC funds and the OMW platform charge is now too high compared to much better options (although still lower than Hargreaves Lansdown, the major DIY provider).

So, its not a particularly onerous transaction and its one that is easily documented and proven to be best advice. So, charging £3k for that is high. Charging a smaller initial fee is not unreasonable as its still around 3 hours work.

If the original pensions were put in place by the same adviser and ongoing servicing charged, then its very common for advisers to not charge any initial fee when changing providers. For most, that is exactly the sort of thing the ongoing adviser fee covers.