Pension transfer % charge

Mnigel

Hi, My IFA is retiring and so I want it to be managed by another company. What is the correct or reasonable % to be charged for the transfer and ongoing what would be a reasonable % charge per annum? One company is quoting 2% and another 3% for the transfer and both 1% pa ongoing. I hope someone can help me. Thanks.

Linton

What is the pot size? 1% ongoing on £50K could be reasonable, 1% on £500K could be expensive.

Mnigel

Hi Linton, its circa £280K

westv

I think 0.50% was the average so 1% is expensive.

Mnigel

Hi. Yes I agree that it is expensive too. Thanks for the replies.

Albermarle

westv said:

I think 0.50% was the average so 1% is expensive.

I think 0.5% is only for bigger pots, although begs the question what is classes as big. The OP might get 0.5% but could well be 0.75% as an ongoing charge.

OP - Sometimes when an IFA retires they 'sell' their client base to a bigger company. In this case there will probably be no initial fees, although there might be higher platform/advisor/fund fees.
Have you checked if this is a possibility ?

dunstonh

Hi, My IFA is retiring and so I want it to be managed by another company. What is the correct or reasonable % to be charged for the transfer and ongoing what would be a reasonable % charge per annum? One company is quoting 2% and another 3% for the transfer and both 1% pa ongoing. I hope someone can help me. Thanks.

Zero intial.

When an IFA sells up and a new IFA is taking over, there is no need for the pension to be transferred.  The new IFA is appointed as the new adviser to the existing plan.  That doesn't cost anything.

I suspect you are looking at FAs rather than IFAs.  FAs require you to transfer it to their company product.   And they charge you in the process.  The best thing is to stick to IFAs.     Wealth management firms "pretending" to be IFAs will also want you to move to their offering.

Ongoing on £280k would be expected in the 0.50-0.75% ballpark.

Albermarle

When an IFA sells up and a new IFA is taking over, there is no need for the pension to be transferred.  The new IFA is appointed as the new adviser to the existing plan.  That doesn't cost anything.

Would the old IFA just pass all the relevant client paperwork to the new one ? Even in this case would not the new IFA want to review all the details with the client, to make sure they were all still valid? Presuming there is some cost involved there ?

dunstonh

Would the old IFA just pass all the relevant client paperwork to the new one ?

It depends on whether it is a managed handover or the client is shopping around for a new adviser.
I managed exit strategy would usually see the old adviser put in place the handover to the new one.

 Even in this case would not the new IFA want to review all the details with the client, to make sure they were all still valid? Presuming there is some cost involved there ?

If there is ongoing servicing, then its clean and easy.  If it was transactional, then you would expect a fee.