Flat fee IFA advice

shortseller09

Hi all, my SIPP operator requires that I take financial advice before using the small pots rule to access my pension.

I cannot see the logic in this seeing as there are no MPAA or LTA implications with this course of action. With standard flexi drawdown, there are potential implications, but no advice is required.

Anyway, I also need some tax advice around LTA (nearly used up) and the implications of taking a small DB pension that is several years away, and so at the same time can cover the small pots advice. Any idea of a potential cost for this one-off advice, probably no more than a couple of hours work I would have thought?

Thanks in advance.

NedS

shortseller09 said:

Hi all, my SIPP operator requires that I take financial advice before using the small pots rule to access my pension.

Who is the SIPP provider?

Albermarle

Any idea of a potential cost for this one-off advice, probably no more than a couple of hours work I would have thought?

The problem you have here is that an IFA will not dispense any advice until they are sure of the full facts about you, and your situation ( scheme rules for the DB pension for example). So this takes time. They then have to document this info ( everything they do is highly regulated) before even starting to look at the best way forward. Then later everything has to be documented again etc . So what I am trying to say is that it will take a lot longer than a couple of hours.

Brie

You need advice or your Sipp operator needs to say you need advice?

You might try getting a one or two hour freebie session to discuss your financial situation and see if that is sufficient.  And you can ask what the fee would be for something more official if a copy of a report is required.  

Dazed_and_C0nfused

Hi all, my SIPP operator requires that I take financial advice before using the small pots rule to access my pension.

There is either a valid reason for this, which presumably you can find out what that is, or why wouldn't you just transfer to another provider?

NedS

Dazed_and_C0nfused said:

Hi all, my SIPP operator requires that I take financial advice before using the small pots rule to access my pension.

There is either a valid reason for this, which presumably you can find out what that is, or why wouldn't you just transfer to another provider?

Why would advice ever be needed to take a SIPP under the 'small pots' rule?

dunstonh

Hi all, my SIPP operator requires that I take financial advice before using the small pots rule to access my pension.

There is no regulatory requirement to take financial advice on small pots.

This may be a mistake that is an unusual requirement.  Who is the SIPP provider?

Any idea of a potential cost for this one-off advice, probably no more than a couple of hours work I would have thought?

Probably around 6 hours work

You might try getting a one or two hour freebie session to discuss your financial situation and see if that is sufficient.  And you can ask what the fee would be for something more official if a copy of a report is required.  

It won't be sufficient for an adviser to sign off on it.   Why would any adviser take on that liability as a freebie and then not have the audit trail/file to support it?

shortseller09

Thanks for all the responses.

The provider is Investacc, and their response to my query is:

'We would allow someone with total SIPP value less than £10,000 to take benefits under the small pension lump sum rules without the need for a financial adviser. However, in all other circumstances, we require an adviser to recommend it, as it does involve changes to the existing arrangements under the SIPP, for which there may be repercussions in some circumstances. The rules are particularly complex and offering guidance on this is not something we would wish to provide, so our legal advisers confirmed that the requirement for a financial adviser would address this, and we note that our stance is not unique.'

Dazed_and_C0nfused

So could you do a partial transfer of say £9950 to HL (just an example not a recommendation) and take it as a small pot from there?

shortseller09

Dazed_and_C0nfused said:

So could you do a partial transfer of say £9950 to HL (just an example not a recommendation) and take it as a small pot from there?

I suppose so, but seeing as I need a bit of advice anyway on a different matter, I presume the additional small pots advice wouldn't really amount to anything anyway.

Albermarle

OK , so you are trying to extract 'small pots' from a larger pension, as opposed to just withdrawing a pension itself worth less than £10K.
AFAIK, none of the mainstream pension/SIPP providers will do this, apart from Hargreaves Lansdown.( but there might be others )
Not sure of the exact reason, but could be that it is clearly exploiting a loophole, and therefore many providers do not want to be associated with it. Plus I would think there would need to be a system in place, plus some admin work involved, and probably just not worth bothering for the relatively few customers who might ask for it.