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DB pension transfer - IFA fee

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I've got a small DB pension that I'm now considering transferring out to 'enjoy the proceeds' ..Transfer value is  £110,000. 
I say 'enjoy the proceeds', help the grown up kids fly the nest fully , new kitchen etc but really want to just draw it down and spend it.
(Before anyone asks we're fine on the financial front with some decent pensions )

I've been quoted 2.5% by the IFA - does this seem reasonable ?  
I've also been quoted 0.75% to manage the funds after withdrawal. That said I want to take it all out eventually and chuck anything left into our VLS60 for the long term where I'm only paying 0.22%
Where would be the best place to lodge the proceeds during this drawdown process. HL Sipp or similar @ 0.45% or let the IFA manage it.
Just a little confused as to the IFA's involvement after they've done their bit - do I sign up with them or can I go my own way. Obviously they would like to manage it but I've been quite comfortable handling our Vanguard funds for example. 
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Replies

  • BrynsamBrynsam Forumite
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    Fee quoted looks entirely reasonable.

    You can either use an IFA to manage your funds, or if you're comfortable, DIY.

    Masses of threads already on this forum - use the 'search forum' box at the top of the page and you'll get plenty of info.
  • PrismPrism Forumite
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    Be prepared for the IFA to recommend you don't transfer. You will then need to make a plan for how you wish to proceed anyway. HL won't take the transfer but others might.
  • tacpot12tacpot12 Forumite
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    The charge for the transfer advice is in line with the marketplace for such advice. Given you have an investment in mind (VLS60), I'm not sure why you need to pay a IFA to manage your pension. Paying him 0.75% plus the higher fees for the funds he wants you to invest in seems like poor value compared to 0.22% for VLS60.
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always check official information sources before relying on my posts.
  • AlbermarleAlbermarle Forumite
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    Probably the IFA will be more likely to recommend a transfer if he/she is at least knowing the funds will be in a portfolio they control and the client will not blow the money and then make a claim for bad advice.
  • bigadajbigadaj Forumite
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    If you take it out quickly, assuming you can transfer, you could end up paying a lot of tax.
  • dunstonhdunstonh Forumite
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    'm not sure why you need to pay a IFA to manage your pension. Paying him 0.75% plus the higher fees for the funds he wants you to invest in seems like poor value compared to 0.22% for VLS60.

    There is more to life than VLS60.  I just checked the state of 3 IFA arranged portfolios of the same risk profile as VLS60 and they came out higher than VLS60 after charges over 1 3 and 5 years.  I threw in another multi-asset fund from a different fund house and that was better than VLS60 over those periods too.  

    There is some dross out there as well but it would be unfair to assume everything except VLS is bad.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • TBC15TBC15 Forumite
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    2.5% is daylight robbery but probably the best you could get today, congratulations on finding someone willing to do it. Manage it after transfer, he’s having a laugh.


  • TBC15TBC15 Forumite
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    Prism said:
    Be prepared for the IFA to recommend you don't transfer. You will then need to make a plan for how you wish to proceed anyway. HL won't take the transfer but others might.
    Good old AJ Bell was my port in a storm, not sure if things have changed.
  • 8370562883705628 Forumite
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    ossie48 said:
    I've got a small DB pension that I'm now considering transferring out to 'enjoy the proceeds' ..Transfer value is  £110,000. 
    I say 'enjoy the proceeds', help the grown up kids fly the nest fully , new kitchen etc but really want to just draw it down and spend it.
    (Before anyone asks we're fine on the financial front with some decent pensions )

    I've been quoted 2.5% by the IFA - does this seem reasonable ?  
    I've also been quoted 0.75% to manage the funds after withdrawal. That said I want to take it all out eventually and chuck anything left into our VLS60 for the long term where I'm only paying 0.22%
    Where would be the best place to lodge the proceeds during this drawdown process. HL Sipp or similar @ 0.45% or let the IFA manage it.
    Just a little confused as to the IFA's involvement after they've done their bit - do I sign up with them or can I go my own way. Obviously they would like to manage it but I've been quite comfortable handling our Vanguard funds for example. 
    If you're going to transfer to a SIPP anyway, and you're going to buy VLS60 anyway, here's my 2p on the subject.
    Vanguard have a SIPP now but it's new and they haven't sorted out the drawdown yet. If you definitely want to drawdown very soon, HL's actual service may be better for you, but Vanguard's platform fee is 0.15% Vs 0.45% for HL so on a £110k pension you would basically be paying HL £330 a year extra for  
    those advantages.
    The 0.75% is the IFA milking you.
    IFA in HL vs VLS60 in Vanguard - 1.1% total difference in fees. Vanguard publish return expectations/outlooks/projections/forecasts every so often (some people are sensitive about which word I use) and VLS60 based on 1% bond yields and 4-6% global equity returns, has an expected return of maybe 4% before fees, 3.6% after fees on the Vanguard platform, so if the IFA was to invest similarly for similar returns - let alone more expensive actively managed funds - that 3.6% you get with vanguard turns into 2.5%. That's almost half your market return expectation of 4% gone.
    In previous posts i have used even more conservative numbers based on my own working out but that made some people a little bit upset.
  • BrynsamBrynsam Forumite
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    Probably the IFA will be more likely to recommend a transfer if he/she is at least knowing the funds will be in a portfolio they control and the client will not blow the money and then make a claim for bad advice.
    Doesn't matter - the requirement is for OP to show they have received advice; they don't have to follow it.
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