Pension transfer costs

thebands

I never quoted small amounts such as £20k. I said no diff between £250k, £500k, £1m.

FA will have indemnity insurance say at 10% of turnover. So 10% of the fee they take off me covers insurance the other 90% covers costs and profit. 

If I have A £250k pot and they charge 1% then that's £2500. £250 covers the indemnity insurance and the remaining £2.25k covers costs and profits.
If I have a £500k pot and they charge 1% then that's £5000. £500 covers the indemnity insurance and the remaining £4.5K covers costs and profits.

There is no difference to the work involved for the two pots, the only difference is £2.25k more profit which comes out of the pot that I have spent my working life building up.

thebands

As per my original question, does anyone know of anywhere that provides fixed price deals?

QrizB

thebands said:

As per my original question, does anyone know of anywhere that provides fixed price deals?

Fixed price to transfer a DC pension? Sure, you can transfer one to Vanguard for free. "Free" is a fixed cost, right?

thebands

DB (Final Salary) Pension

QrizB

thebands said:

DB (Final Salary) Pension

You hadn't said that until now

Marcon

thebands said:

Are there any fixed price transfers ?

I have no problems with paying for financial advice but absolutely disagree with it being a % fee of my savings.

The considerations and the effort for an FA are fundamentally the same whether the transfer value is £250k, £500k or £1m, why should the FA take a bigger fee just because someone has been prudent enough to save themselves a bigger pot?

Some IFAs operating in the DB transfer advice market are having the advice for each client individually underwritten - so the PI cost is directly linked to the value of the transfer. That's why.

Thrugelmir

thebands said:

p00hsticks said:

It's not the effort involved in the initial transfer that's the issue - it's the potential compensation that would need to be paid if the person later decided they'd 'been mis-sold', and the insurance to cover it that will be dependent on the sum involved.

Are you sure about that? The FA will already have suitable professional indemnity insurance cover they won't be taking individual cover for each client they take on. Yes I know they have to pay for the insurance but I doubt it is such a linear relationship. Seems more a case of you have more money so I want a bigger slice.

PI is determined by declared exposure. Initially forecast then adjusted at the end of each accounting period for the actual business to be underwritten. Commercial insurances are rarely set in the stone at the outset. Constant declarations and adjustments. 

HappyHarry

thebands said:

As per my original question, does anyone know of anywhere that provides fixed price deals?

The trouble with fixed price costs is that those with smaller transfer values subsidise the costs of those with larger transfer values.

Whilst this understandably appeals to those with larger transfer values, it doesn't suit the whole market.

dunstonh

FA will have indemnity insurance say at 10% of turnover. So 10% of the fee they take off me covers insurance the other 90% covers costs and profit. 

Goodness.  Who would have thought that you know more about the business costs of IFAs than IFAs themselves. Please do let us know how you find this magical unicorn of 10% costs?

Bimbly

I thought it was more relevant to add to this thread rather than a brand new one as it's the same sort of issue. I'm in a similar position although not retired yet.

Always best to start a new thread. It becomes confusing otherwise, as people end up answering the original poster and not you - then, sometimes, it's not clear which one they're answering.

Also, this thread appears to have gone off track...