DB transfers - fixed fee

Wilbur63

Hi there..  I have a a decent sized DB pension fund.  I am in my late 50's, no dependents and so not bothered about leaving an inheritance.  Married and still looking to work for a few years.  Given I have no dependents , the death benefit advantages of transferring the DB fund out to a SIPP are attractive.  I would like to put the fund in a SIPP, take some tax free cash to build a house on some land I own ( this would make a lot of money I could then invest back into my pension ) and then maybe invest in a commercial property via the SIPP.

The thing is - I am shocked how much IFA's are charging to review and sign off for the transfer.  I know what I want.  I worked in the investment industry for years and I understand the issues.   Searching for a reasonable fixed-fee IFA to do the work is proving difficult. I am not going to sign up for a "% of the fund" deal and I do not want "ongoing management".  Why the heck should this cost me £10-15,000 ? (Which is what a local firm is proposing).  I know they have indemnity insurance to pay, but this seems excessive.

Where can I find fixed fee DB advice at a sensible cost?  Thanks.

Albermarle

Are you aware that you can pay the fee and still get a negative recommendation, so you will have wasted your money?

 the death benefit advantages of transferring the DB fund out to a SIPP are attractive. This will not be seen as a priority issue. 

I would like to put the fund in a SIPP, take some tax free cash to build a house on some land I own ( this would make a lot of money I could then invest back into my pension ) and then maybe invest in a commercial property via the SIPP.

This could well be a red flag to any IFA. Giving up guaranteed income , to invest in potentially risky ventures

Anyway this subject has been discussed many, many times on this forum . If you type 'DB transfer' into the search box at the top of page, you will see many previous threads come up.

Dazed_and_C0nfused

I have a a decent sized DB pension fund

No you don't, there is no fund with a DB pension.

You presumably have a decent DB pension.  And the scheme are offering you some money to get rid of their liability to pay that pension to you for upto 40 years.

There are loads of threads about this on here if you have a search.

dunstonh

Given I have no dependents , the death benefit advantages of transferring the DB fund out to a SIPP are attractive.

Don't you mean the other way around?  i..e no dependents means you don't care about death benefits.

The thing is - I am shocked how much IFA's are charging to review and sign off for the transfer.  I know what I want.  I worked in the investment industry for years and I understand the issues.  

That is contradictory.  If you understand the issues then you wouldn't be shocked at the charges.

 Why the heck should this cost me £10-15,000 ? (Which is what a local firm is proposing). 

I thought you said you understood the issues?

 I know they have indemnity insurance to pay, but this seems excessive.

It's not excessive.   As CETVs have dropped back so much over the last 6 months, it has increased the risk even further and made the number of potentially suitable to transfer cases reduce.  PI has gone up again.   Even the regionals and nationals, who could often get the volume to just above cover the PI, are pulling out now.

Where can I find fixed fee DB advice at a sensible cost? 

In the current market, £10k is not bad.  But remember that you pay that even if the advice is not to transfer.  And if the advice is not to transfer, you won't find a provider willing to take it.

daveyjp

If you worked in the industry and understand the issues you should also understand why it costs so much for insurance to cover the risk that you could potentially 'lose' a significant proportion of your cash a few months after you invest in a SIPP.  I doubt you will be happy to simply accept that's how the world spins and you were very happy with the decision, especially in the cold light of day that you may live another 40-50 years.

The starting point for your discussion with an IFA is how you achieve what you want with the DB pension you have.  Borrowing money against a guaranteed income should be far easier and cheaper than navigating a transfer.

squirrelpie

"I would like to put the fund in a SIPP, take some tax free cash to build a house on some land I own ( this would make a lot of money I could then invest back into my pension )"
Do you have enough earned income and are you in a position to use carry back? Or is the reason for putting the money back in your pension not to seek tax avoidance?

Marcon

Wilbur63 said:

I would like to put the fund in a SIPP, take some tax free cash to build a house on some land I own ( this would make a lot of money I could then invest back into my pension ) and then maybe invest in a commercial property via the SIPP.

You do realise you can only contribute a maximum of the lower of 'relevant UK earnings' (which does NOT include income from property, savings, dividends etc - it usually means earned income) and £40K (including tax relief) in any tax year? If you want to use carry back, you'd need to have relevant UK earnings covering the whole of the amount you want to invest in a particular tax year e.g. if you wanted to invest £40K in the tax year 2023/24, you'd need to earn £120K in that tax year.

Wilbur63 said:

Hi there..  I have a a decent sized DB pension fund.  I am in my late 50's, no dependents and so not bothered about leaving an inheritance.  Married and still looking to work for a few years.  Given I have no dependents , the death benefit advantages of transferring the DB fund out to a SIPP are attractive.  

Where can I find fixed fee DB advice at a sensible cost?  Thanks.

I'm confused. If you aren't worried about leaving an inheritance, why are the death benefit advantages of a SIPP attractive? 

westv

The OP seems to have gone away for the moment.
I'm curious to know how much DB pension they want to give up and what value of DC pot they are expecting.

Marcon

westv said:

The OP seems to have gone away for the moment.
I'm curious to know how much DB pension they want to give up and what value of DC pot they are expecting.

People often do if they don't get the answers they want, which is understandable if a bit frustrating for those trying to help.

Bimbly

Marcon said:

People often do if they don't get the answers they want, which is understandable if a bit frustrating for those trying to help.

I believe they were after recommendations of firms which can provide fixed fee DB transfer advice and that's not the response they got, so I can see why they didn't return.

dunstonh

Bimbly said:

Marcon said:

People often do if they don't get the answers they want, which is understandable if a bit frustrating for those trying to help.

I believe they were after recommendations of firms which can provide fixed fee DB transfer advice and that's not the response they got, so I can see why they didn't return.

It is statistically unlikely they will find that model in the current environment.