FCA: DB transfer advice shouldn't cost more than £3,500

[Deleted User]

FCA: DB transfer advice shouldn't cost more than £3,500

https://citywire.co.uk/new-model-adviser/news/fca-db-transfer-advice-shouldnt-cost-more-than-3500/a1254565

According to the FCA, the ‘typical market charge’ rate for a pension transfer specialist is around £200 per hour, and for support staff it is around £100 per hour.

‘Assuming the pension transfer specialist carries out half of the hours, this produces a charge to the client of £3,000 to £3,500, which will include an allowance for overheads and a profit margin,’ the FCA said.

Pension_Geek

And what of insurance costs?

[Deleted User]

Pension_Geek wrote: »

And what of insurance costs?

The regulator also said firms ‘that can consistently give good advice’ should be able to negotiate good professional indemnity (PI) insurance renewal rates. As a result, it said £3,500 should be considered a good limit to bear in mind when considering pension transfer fees.

tacpot12

I have thought for sometime that the insurance cost should be separate from the charge for advice, and should only payable by the client wants to act on the advice. If the client does not want to take the advice, the cost to the client should just be the time that the IFA has spent on the advice (overheads and profit should be included in the time that the client is billed for).

Pension_Geek

ZingPowZing wrote: »

The regulator also said firms ‘that can consistently give good advice’ should be able to negotiate good professional indemnity (PI) insurance renewal rates. As a result, it said £3,500 should be considered a good limit to bear in mind when considering pension transfer fees.

The regulator can say what they want, but there are swathes of advisers stopping this type of advice because of the rocketing costs of insurance.

Albermarle

By coincidence noticed this on Fidelity website :

The fee for our advice service is based on the number of pensions you have and can include both defined contribution pensions and those with safeguarded benefits, such as defined benefit schemes which includes final salary and career average pensions.
1 pension
£3,500 (+ VAT where applicable)
It's an FA - not IFA service though - can only recommend investments on the Fidelity platform .
However I know Fidelity platform does not accept insistent clients , so some clarity would be needed as to what happens in case of a negative recommendation .

jaybeetoo

At last, the FCA supporting fixed fees rather than firms charging a % of the assets. Makes much more sense.

Marcon

Only 2 PI insurers still in the market for advisers who advise on transfers from schemes with safeguarded benefits. Tells its own story.

Marcon

tacpot12 wrote: »

I have thought for sometime that the insurance cost should be separate from the charge for advice, and should only payable by the client wants to act on the advice. If the client does not want to take the advice, the cost to the client should just be the time that the IFA has spent on the advice (overheads and profit should be included in the time that the client is billed for).

The advice could still be bad and the client could be misled into doing something daft because they don't rate the advice.

Thrugelmir

Is an article from last July. Matters have moved on since then.

Dasa

Has anyone had any experience with a company called Pension Works? They've quoted me £500 to look into transferring a deferred DB amount of £48,000 TV and £3000 for doing the transfer if they think it worthwhile.