Financial Advisor Charges

morrismadhouse

What are the normal % charges for initial advice and ongoing advice on a pension pot of £200k?
I realise these can vary but an uncomplicated situation, where I have 6 pensions and want to consolidate, what could you expect?

MallyGirl

You could DIY and have no charges at all for the transfers. If you need advice then someone will be along with some representative figures

DRS1

It might help if you said what sort of pensions they are.  Are they all defined contribution personal pensions?  Do any of them have safeguarded benefits - such as a guaranteed annuity rate?  Or are they old occupational pension schemes providing defined benefits eg final salary schemes or CARE schemes?

Some are easier to consolidate than others.

Oh and why do you want to do it?

morrismadhouse

All are defined contribution pensions 2 of which are private pensions the rest are workplace pensions. No safeguarded benefits as far as I know. Why? easier to manage and improved investment.
We have a quote but the charges seem high and wanted to understand what is 'normal'

dunstonh

All are defined contribution pensions 2 of which are private pensions the rest are workplace pensions.

For reference, private pension is not a defined term.  Some people refer to anything except state as private.  Some do it the way you have.

We have a quote but the charges seem high and wanted to understand what is 'normal'

On your value and with 6 schemes, probably around £4k initial, Ongoing will range from 0.50% to 1.00%.     

DRS1

If they are all nice simple DCV schemes then as @MallyGirl says you could DIY it.

Improved investment may not be a factor of the pension but of the investments inside the pension - you may get more choice moving to a SIPP (but is more choice always a good thing?).  You may get improved investment by switching the investments inside your existing pensions depending on what they have available.

What you might want to check are fees - some workplace schemes have a negotiated level of fees which can be better than you would get as an individual.  Fees can be complicated to work out with platform fees and then fees inside the investment fund so may need a bit of digging.

Another thing to think about with an adviser is what will they do going forward?  Are they going to give you ongoing investment advice?  Do you need it?  Oh and avoid a Financial Adviser - check they are Independent (so IFA not FA).

bjorn_toby_wilde

Also worth considering the small pots rule (google it).  Consolidating is often a good idea but not always.

Albermarle

Another thing to think about with an adviser is what will they do going forward?  Are they going to give you ongoing investment advice?  Do you need it?  Oh and avoid a Financial Adviser - check they are Independent (so IFA not FA).

OP - Normally an IFA would transfer the 6 pensions into one of the pension providers that they work with on a regular basis. That is not because they get commission, but because they are familiar with certain providers processes, and they know which ones have good IT systems and respond quickly.
Alternatively it is possible to just get advice on an investment portfolio that would be suitable, and then open a new pension your self and transfer your other ones into it and then invest as advised. I presume this route is cheaper, but you need to do more of the legwork. I also suspect you will find less IFA's willing to offer this service than the more usual ongoing one ( but I could be wrong).

One area to think about is that an IFA will also make sure that everything you do is tax efficient and in line with the latest legislation.  Then when you come to withdraw, they can have a cash flow plan and again minimise any tax.

For example most of the discussions between the regular posters on here are not directly about investments as such, but as much about tax/legislation/ the Budget !/ quirks with different providers/how much to withdraw each year etc

ian16527

I got an IFA to do what you are proposing. I consolidated 5 DC pensions from previous employers. The cost was 3%. He then put me in a Scottish Widows pension. They weren't high value, about £65k. He also recommended ongoing advice which was a review meeting once a year for 0.5%

He also recommended for me to transfer my 2 DB pensions as well. The reason for this he said would give me more Tax Free Lump. I said OK lets have a look, but the firm he contacted to transfer said it was not in my best interests at the time. I had already decided not to transfer after reading lots if threads on here.

After reading lots on this forum, I then transferred the remaining 2 DC pensions myself - very easy.

I used Fidelity initially, but as I used mainly Vanguard funds, I transferred to them for lower costs along with the S/Widows one. I had already cancelled the ongoing advice fee as I was not happy with him pushing to transfer the DB ones. 

I would do it yourself, just open the SIPP of your choice and it looks like you have some investment ideas already. I find Vanguard OK for what I need to do as I am in drawdown now.
 

wjr4

ian16527 said:

He also recommended for me to transfer my 2 DB pensions as well. The reason for this he said would give me more Tax Free Lump. I said OK lets have a look, but the firm he contacted to transfer said it was not in my best interests at the time. 

Well that is worrying! Nobody should be pushing you to do this. Doesn’t sound like an IFA to me.