Accessing Pension Pot

knappettg

I have a Standard Life Pension pot that I have not touched since retirement 10 years ago. I also have a Legal and General pension that I currently live off.
I want to start drawing down from my Pension pot. My financial adviser (who has recently 'merged' with a larger company) has said it will cost £3,000 to arrange this. Their fee - not Standard Life.
Is this reasonable?
Should I have been told that fees would be involved in accessing my pension before I opened it?
How easy is it to find an Adviser with lower charges and then move to them?

QrizB

Financial Advisor or Independent Financial Advisor? Which big company has s/he recently joined? What's the approximate value of the SL pension pot?

Putting this fee to one side, are you generally happy with your (I)FA, the services they provide to you and the fees they charge?

How complicated are your financial affairs? Would you be comfortable as a DIY investor?

Marcon

knappettg said:

I have a Standard Life Pension pot that I have not touched since retirement 10 years ago. I also have a Legal and General pension that I currently live off.
I want to start drawing down from my Pension pot. My financial adviser (who has recently 'merged' with a larger company) has said it will cost £3,000 to arrange this. Their fee - not Standard Life.
Is this reasonable?
Should I have been told that fees would be involved in accessing my pension before I opened it?
How easy is it to find an Adviser with lower charges and then move to them?

Any reason you can't do it yourself rather than using your adviser? If it's an old SL contract which doesn't support drawdown, ask SL if you can switch to a more modern product with them which does support it.

Albermarle

Are you paying this advisor a regular fee?
If so there should be no/a modest charge for starting drawdown, even if it means transferring to a new product.

As said it is likely that your older SL pot does not support drawdown, so you will need SL to transfer you to one of their more modern pension schemes. Or you could transfer out to another provider.

DRS1

You may want to check if you have any special benefits in the SL pension such as a GAR - is it a with profits policy?

dunstonh

I want to start drawing down from my Pension pot. My financial adviser (who has recently 'merged' with a larger company) has said it will cost £3,000 to arrange this. Their fee - not Standard Life.
Is this reasonable?

It depends.

For example, for our ongoing servicing clients we do not charge for drawdown events as that falls within the ongoing service.   However, someone who is not an ongoing servicing client would be charged.  That is a pretty standard model.

Should I have been told that fees would be involved in accessing my pension before I opened it?

Only if you bought it in the last year or two and your plans were known.

You say it is over 10 years old.  That means the options available today are different to what they were 10 years ago.   So, how could they tell you the fees of something that didn't exist at the point of purchase.

How easy is it to find an Adviser with lower charges and then move to them?

You may get cheaper but you are not far off the ballpark you would expect to pay.

knappettg

Thanks all. The pot is c£750k and I pay the IFA 0.5% pa service charge. The new IFA group normally charge 1% but will honour the 0.5% for existing clients. Their charges for arranging drawdown range fro £3k to £10k because it is “a change in circumstances and regulatory advice point. We have to undertake a process that takes time and in the eyes of the FCA is a regulatory risk to commence Income Drawdown without understanding the risks and alternative retirement options. We will prepare a Lifestyle Financial Plan and send you a lengthy written report detailing our recommendations and analysis”
This seems over the top to me but would appreciate your thoughts.

Marcon

knappettg said:

Thanks all. The pot is c£750k and I pay the IFA 0.5% pa service charge. The new IFA group normally charge 1% but will honour the 0.5% for existing clients. Their charges for arranging drawdown range fro £3k to £10k because it is “a change in circumstances and regulatory advice point. We have to undertake a process that takes time and in the eyes of the FCA is a regulatory risk to commence Income Drawdown without understanding the risks and alternative retirement options. We will prepare a Lifestyle Financial Plan and send you a lengthy written report detailing our recommendations and analysis”
This seems over the top to me but would appreciate your thoughts.

If that's how you feel, then the DIY option looks a better bet - or more accurately a cheaper one.

dunstonh

knappettg said:

Thanks all. The pot is c£750k and I pay the IFA 0.5% pa service charge. The new IFA group normally charge 1% but will honour the 0.5% for existing clients. Their charges for arranging drawdown range fro £3k to £10k because it is “a change in circumstances and regulatory advice point. We have to undertake a process that takes time and in the eyes of the FCA is a regulatory risk to commence Income Drawdown without understanding the risks and alternative retirement options. We will prepare a Lifestyle Financial Plan and send you a lengthy written report detailing our recommendations and analysis”
This seems over the top to me but would appreciate your thoughts.

They are right that drawdown takes a lot more work but you need to ask them what the point of paying ongoing servicing is when they are going to charge fees for doing work that other IFAs do under their ongoing servicing at no additional cost.

Things like modelling and sustainability plans are all part and parcel of ongoing advice when draws are being made.

So, I would be considering alternatives if they don't back down on the initial fee.   However, an advised alternative will unfortunately, almost certainly see an initial fee that could be in the same ballpark because of all the initial work involved.