DB Transfer - costs

Marcon

phynix_uk said:

You might find more success using a larger company, one that can afford the insurance, that has experience and can afford to say no to you.

Any adviser can afford to say no...their problems start if they say 'yes'!

debroxton

xylophone said:

However, you now mention a health condition.

A transfer out may bring its own problems.....

https://adviser.royallondon.com/pensions/viewpoint/2021/june/transferring-pensions-in-ill-health/

Thanks for the link @xylophone, I didn't know that.  Thankfully, I'm not that ill but even if I was, something for my beneficiaries would be better than nothing.  

Malthusian

As this is for the benefit of your beneficiaries rather than yourself, they can pay the £15,000.

They should also probably be prepared to assist with and cover the cost of you opening a Small Self-Administered Scheme that would be able to accept a transfer against advice (unless you already have a stakeholder pension open). "I smoke and drink" is not in itself a reason to cash in a DB scheme. Many people will smoke, drink and still get full value out of their DB pension. As you started looking at this three years ago, this isn't a deathbed planning scenario.

Albermarle

phynix_uk said:

DB transfer advice is complex and heavily regulated. As mentioned in previous comments, a lot of IFAs have withdrawn from the market leaving options limited and often expensive. 

It's important to understand the risks involved and since non-contingent charging came into play you need to pay upfront without knowing what the outcome will be.

You should be able to discuss the advantages/disadvantages to a potential transfer prior to deciding if you want to go down this road. A decent IFA should take time to help you understand your current benefits, if they are already suitable then you should think carefully about why you would want to jeopardise that. 

Health is a consideration but often not enough to justify a transfer on it's own. Legacy planning another, flexibility to income and drawing lump sums out however, the downsides are very real. Higher costs, complexities, RISK, giving up valuable safeguarded benefits.

As an adviser who deals with these transfers I can understand the attraction but you should go into this with your eyes wide open. You might find more success using a larger company, one that can afford the insurance, that has experience and can afford to say no to you.

Is it still possible to be 'Triaged' first at a much lower cost, to see if it is likely you will get a positive recommendation, or not ?

By the way if you are a financial advisor by profession, I think it is a forum requirement to declare this with a statement at the bottom of your posts.
If you scroll up the thread to the post of 'dunstonh' you will see an example.

Neilb1969

I'm currently going through the process of a DB transfer. Looked at a lot of companies and ended up with LV Finance who charge a flat fee of c.£4600 including VAT. That's for full advice (they don't offer Abridged) and it's payable up-front. I'd also considered Aviva who offer abridged for £800+VAT which is then offset against final fee if you go ahead. Final fee for me would have been their max of £10775 (which is taken from the pension rather than up-front), but Aviva will only consider you if you're 53 or older. I'm happy with LV so far - did all the fact finding pretty quickly and now just waiting for them to write up the report and recommendation.

dunstonh

who charge a flat fee of c.£4600 including VAT. 

It shouldn't be vatable if it's a single fee.  

Neilb1969

dunstonh said:

who charge a flat fee of c.£4600 including VAT. 

It shouldn't be vatable if it's a single fee.  

So LV Finance are incorrectly billing their clients?

dunstonh

Neilb1969 said:

dunstonh said:

who charge a flat fee of c.£4600 including VAT. 

It shouldn't be vatable if it's a single fee.  

So LV Finance are incorrectly billing their clients?

Intermediation is not subject to VAT 

If they were breaking the service down into individual parts and charging by the part, then some parts are Vatable.  Some are not.  However,  where there is a single charge, there is no VAT.

The exception would be where you said you wanted advice but had no intention to buy the product via them.  That would be vatable.  However, DB transfer advice clearly involves an intention to buy a product

Neilb1969

dunstonh said:

Neilb1969 said:

dunstonh said:

who charge a flat fee of c.£4600 including VAT. 

It shouldn't be vatable if it's a single fee.  

So LV Finance are incorrectly billing their clients?

Intermediation is not subject to VAT 

If they were breaking the service down into individual parts and charging by the part, then some parts are Vatable.  Some are not.  However,  where there is a single charge, there is no VAT.

The exception would be where you said you wanted advice but had no intention to buy the product via them.  That would be vatable.  However, DB transfer advice clearly involves an intention to buy a product

I assume they are comfortable they are not actually operating as an intermediary and are just providing me with the report. It would seem a bit strange if a company as big as LV who no doubt do hundreds of these reports didn’t understand the FCA guidance on VAT charging 

sandsy

Neilb1969 said:

dunstonh said:

Neilb1969 said:

dunstonh said:

who charge a flat fee of c.£4600 including VAT. 

It shouldn't be vatable if it's a single fee.  

So LV Finance are incorrectly billing their clients?

Intermediation is not subject to VAT 

If they were breaking the service down into individual parts and charging by the part, then some parts are Vatable.  Some are not.  However,  where there is a single charge, there is no VAT.

The exception would be where you said you wanted advice but had no intention to buy the product via them.  That would be vatable.  However, DB transfer advice clearly involves an intention to buy a product

I assume they are comfortable they are not actually operating as an intermediary and are just providing me with the report. It would seem a bit strange if a company as big as LV who no doubt do hundreds of these reports didn’t understand the FCA guidance on VAT charging 

FCA don't have guidance on VAT. That's for HMRC:

https://www.gov.uk/hmrc-internal-manuals/vat-finance-manual/vatfin7665