BT DB Pension Advice Fee (Hub Pension Consulting)

idontknow2

I have contacted a company appointed by my ex employer, HUB consulting, in relation to pension advice around transferring out of my DB scheme.  It seems the fee is £875 but, depending upon the outcome of the assessment, I am not tied to them to manage any investments going forward.  I realise its subject to an assessment on my pension(s), current and expected future financial position as well as those of my spouse and our income expectation in retirement.  I have spent some time looking at posts on transferring out and IFA fees and the potential litigation expected from an IFA following advice and hence high fees or the expectation that you use them to manage your funds.  With that in mind am I being completely naive here expecting HUB to charge me 875 with the possibility that they may agree with my opinion and suggest I do transfer out of my DB pension and then I am free to invest with whom I please going forward?

I ask as most of the posts I have read have suggested much higher fees and this is a fixed fee not a % of DB Transfer Value?

thanks 

Marcon

idontknow2 said:

I have contacted a company appointed by my ex employer, HUB consulting, in relation to pension advice around transferring out of my DB scheme.  It seems the fee is £875 but, depending upon the outcome of the assessment, I am not tied to them to manage any investments going forward.  I realise its subject to an assessment on my pension(s), current and expected future financial position as well as those of my spouse and our income expectation in retirement.  I have spent some time looking at posts on transferring out and IFA fees and the potential litigation expected from an IFA following advice and hence high fees or the expectation that you use them to manage your funds.  With that in mind am I being completely naive here expecting HUB to charge me 875 with the possibility that they may agree with my opinion and suggest I do transfer out of my DB pension and then I am free to invest with whom I please going forward?

I ask as most of the posts I have read have suggested much higher fees and this is a fixed fee not a % of DB Transfer Value?

thanks 

Very sensible question.

Are you sure the fee isn't for something called 'abridged' advice? If it is, the only outcomes can be a recommendation not to transfer your DB pension, or that the position is unclear and a full advice process is needed (which is likely to cost more - you'd need to check with them to confirm).

It's possible your ex employer is picking up some of the cost and this is the fee you'd pay for full advice, but again, best way to be sure is to check direct if you can't be sure from the paperwork.

idontknow2

Thanks for the response and no, I am not sure if the fee relates to abridged advice but I will ask as you say.  It would stack up more if my old employer are contributing to the costs and I did ask that question but the response was vague.

xylophone

There is a HUB web site.

https://www.hub-group.co.uk/our-companies/hub-pension-consulting/

What we do

We help companies reduce their Defined Benefit pension scheme liabilities by providing regulated advice to individual members.

Our de-risking exercises have varied from 1 to 8,200 members, so we’re happy to take on any project, large or small.

We aim to deliver the best possible member experience and outcome:

You have seen below?

https://info.hubfinancialsolutions.co.uk/BT-Members-Scheme

https://info.hubfinancialsolutions.co.uk/BT-Members-Fee-Guide?elqTrackId=a41c8d06bcd0438c951b8fe9488859a1&elq=00000000000000000000000000000000&elqaid=844&elqat=2&elqCampaignId=

najan49

Seems to me that 875 (+VAT) gets you not much more than you would get for free on this forum.

dunstonh

najan49 said:

Seems to me that 875 (+VAT) gets you not much more than you would get for free on this forum.

It shouldn't be vatable unless it does not offer any intermediation.  The fact there is VAT suggests it is not full advice.

idontknow2

najan49 said:

Seems to me that 875 (+VAT) gets you not much more than you would get for free on this forum.

What it gives me, potentially, is an IFA deciding in my favour to transfer out of my DB pension,  Useful as this forum is, it cannot provide that.

HappyHarry

I would check very carefully beforehand what you will be getting for your fee. The links from  @xylophone and the fact you are being charged VAT implies that you will not be receiving regulated advice on whether to transfer or retain your DB pension.

Joey_Soap

This stinks to high heaven. BT are hoping to reduce their liability and couldn't give a hoot about the after effect on the individual. Personally, I think such practice should be banned and BT told firmly to abide by the agreement they made with ex employees. A transfer out of a BT DB pension is probably a very bad idea for the individual. But very lucrative for BT. That'll be all they care about. The firm of advisors just want to talk to the maximum number of BT plan members and are conflicted because the more they get to see, the more they make. I know from first hand experience that stories of someone getting a few hundred thousand pounds in their hands from a pension transfer spreads like wildfire through a company.

Both BT and HUB know that too. The practice needs to be banned.

Lowtrawler

Joey_Soap said:

This stinks to high heaven. BT are hoping to reduce their liability and couldn't give a hoot about the after effect on the individual. Personally, I think such practice should be banned and BT told firmly to abide by the agreement they made with ex employees. A transfer out of a BT DB pension is probably a very bad idea for the individual. But very lucrative for BT. That'll be all they care about. The firm of advisors just want to talk to the maximum number of BT plan members and are conflicted because the more they get to see, the more they make. I know from first hand experience that stories of someone getting a few hundred thousand pounds in their hands from a pension transfer spreads like wildfire through a company.

Both BT and HUB know that too. The practice needs to be banned.

In theory, Hub should provide independent advice tailored to the individual. If not, there will be a torrent of claims later on.

Having said that, I went through a similar process with a former employer and their assigned advisors a couple of years ago. The Company had gone insolvent and the pension scheme was considered for transfer to the pension protection fund but found to be solvent in its own right and so survived. For £750, we could receive advice. The transfer values were pretty generous - around 33x pension value and the pension fund itself had no linkage to CPI or other required increments.

I know 3 others who took advice and we were all advised to transfer out. Not only were we advised to transfer out but apparently it suited us to all be transferred to the same place with the same investment strategy. I'm astute enough to know this was all a bit fishy but it also suited me to get a recommendation to transfer. My wife and I had built up large DB scheme benefits elsewhere and, with state pension, will largely not rely on any Money Purchase scheme. Thus, it can be used as an emergency fund or to provide some inheritance. At 33x value and with my ability to take on risk, I was happy to play along.

I wouldn't want to be providing professional indemnity insurance to Hub or the firm I used but it certainly can be a cost effective solution for some people.

idontknow2

HappyHarry said:

I would check very carefully beforehand what you will be getting for your fee. The links from  @xylophone and the fact you are being charged VAT implies that you will not be receiving regulated advice on whether to transfer or retain your DB pension.

Tbh I thought I had checked it during the initial call I had with them.  I pay them the fee and then they make the assessment and advise accordingly in an impartial way?