Transfer DB pension

Albermarle

TransferDB said:

"If you are going down this route with this IFA , then I would suggest you get full clarification from them about how you are able to deal with RL directly ( if you want to) , once the IFA has set it up ."

Yes, that might be the best option - I just think that a pension that is classed as "Flexi Drawdown" should be exactly that; and I find the claim from my IFA "that all providers now restrict clients some of the ability to adjust payments or take ad hoc sums, unless cleared or approved by their IFA" to be quite bizarre. It either is or it isn't flexible (within some sensible limits of course). 

There are many providers who will take instructions about payments etc direct from the customer.
However when the customer starts the process/changes the process/takes ad hoc payments, then the provider is obliged to ask a number of questions to make sure  that the client understands what they are doing . For example if they take money out too quickly it might run out too soon . This may mean filling in forms, having a long telephone discussion etc
The idea is that it stops the client making a silly mistake, and at the same time covers the providers backside in case of a later complaint.
It can be a bit of a nuisance .
If you are dealing via an IFA, this process is unnecessary, as the provider assumes the IFA is discussing all these issues with you anyway . 

dunstonh

Yes, that might be the best option - I just think that a pension that is classed as "Flexi Drawdown" should be exactly that; and I find the claim from my IFA "that all providers now restrict clients some of the ability to adjust payments or take ad hoc sums, unless cleared or approved by their IFA" to be quite bizarre. 

It is bizarre if they are recommending RL but not bizarre if they are recommending a provider that only transacts via advisers.

Aviva platform, for example, could almost certainly be cheaper than RL on a similar investment strategy.  However, they require the adviser to key in every drawdown transaction and confirm it was on advised basis. They wont accept non-advised drawdown cases.

TransferDB

Yes, I think that sounds about right and I understand the reasons pension providers do it as you have stated - I was just hoping NOT to have to pay for an IFA (at 0.5% a year or say £1,000 out of the fund) to do basically nothing! In the first year I was planning to take just half the tax free cash lump sum and a £1,000 monthly pension and not alter a single thing (unless the markets crash).
I still resent paying for a IFA (he has said it is optional - but that 99.9% of his clients are happy to pay this percentage) for the simple task of altering a payment (up or down) or taking the remaining tax free cash at some point; which could take a few emails a few calls or whatever and that isn't worth paying £1k for IMO.
On the Royal London site (if you click on view as an IFA) they clearly state the adding of the IFA into the equation can & does increase their business turnover and profit!  

TransferDB

dunstonh said:

Yes, that might be the best option - I just think that a pension that is classed as "Flexi Drawdown" should be exactly that; and I find the claim from my IFA "that all providers now restrict clients some of the ability to adjust payments or take ad hoc sums, unless cleared or approved by their IFA" to be quite bizarre. 

It is bizarre if they are recommending RL but not bizarre if they are recommending a provider that only transacts via advisers.

Aviva platform, for example, could almost certainly be cheaper than RL on a similar investment strategy.  However, they require the adviser to key in every drawdown transaction and confirm it was on advised basis. They wont accept non-advised drawdown cases.

Yes and AVIVA won't take money from the DB scheme into their drawdown anyway so I cannot use them.

Albermarle

TransferDB said:

Yes, I think that sounds about right and I understand the reasons pension providers do it as you have stated - I was just hoping NOT to have to pay for an IFA (at 0.5% a year or say £1,000 out of the fund) to do basically nothing! In the first year I was planning to take just half the tax free cash lump sum and a £1,000 monthly pension and not alter a single thing (unless the markets crash).
I still resent paying for a IFA (he has said it is optional - but that 99.9% of his clients are happy to pay this percentage) for the simple task of altering a payment (up or down) or taking the remaining tax free cash at some point; which could take a few emails a few calls or whatever and that isn't worth paying £1k for IMO.
On the Royal London site (if you click on view as an IFA) they clearly state the adding of the IFA into the equation can & does increase their business turnover and profit!  

It is probably true that the majority of their clients do pay an ongoing fee, but if you don't want to pay it then don't !
The RL fund suggested will manage itself to a large extent.
If your feelings/circumstances change then you could always pay the IFA for a one off meeting at a later stage . Become a 'transactional client' in the jargon.

ukdw

As you've only got until Monday afternoon, and don't need to keep the IFA permanently, or even stay with Royal London long term,  then as long as you are still happy to transfer, then in your position I would be tempted to proceed, and then sort out whether to keep the IFA or stay with RL until later.

0.5% ongoing charge for an IFA on a pot of around £200k doesn't sound massively expensive when compared to other rates quoted on this board.  RL charges would probably be about 0.45% after rebate,  or about 0.3% after profit sharing is taken in to account - so a total of about 0.8%.   Also these charges would only apply to the 75% of the pot you leave in the pension after you have extracted the PCLS.

Also I imagine these charges would come out Gross direct from the pension pot - so you could probably take another 20% off to calculate the real net annual cost.

TransferDB

Yes, the figures you quoted are right and you are probably right or sensible to advise continuing with the ongoing IFA THANKS - I am only taking half of the lump sum initially as the rest can be taken in another year. 

AlanP_2

I have a transferred DB CETV in a RL Managed Portfolio setup by the IFA who provided the initial advice.

They have no ongoing involvement as I declined it so I deal with RL direct.

Taking one-off (75 taxed / 25% tax free) lump sums is easy, 5 minute call, receive email quote (often before call finsihes), confirm acceptance and money in bank within a few days.

I looked in to process for setting up monthly drawdown but haven't as not needed it. It would mean a much longer call with a specialist team to make sure you realise what you are doing and understand the potential consequences. They reckoned it would take about a month before payments get set up.

All seems back to front in my mind. 5 minute call with normal call centre where I could take out the whole pot in one go compared to a lengthier process with a specialist to set up a regular monthly draw. 

TransferDB

Mine will be a monthly drawdown + half of the T-F-Cash (as I retire next March) and due to ill health, had to pay 3% to get out of the DB schemes but it should be worth it. My feeling is I won't need IFA to manage things but might do it for a year and can cancel thje advice

TransferDB

Signed off the DB transfer yesterday and kept the ongoing IFA advice after all. Just got to wait now until the funds get moved - Thankyou to everyone who offered advice and comments on here,