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  • FIRST POST
    • mwhit
    • By mwhit 15th Nov 19, 5:50 PM
    • 11Posts
    • 3Thanks
    mwhit
    Minimal IFA costs, transferring to SIPP
    • #1
    • 15th Nov 19, 5:50 PM
    Minimal IFA costs, transferring to SIPP 15th Nov 19 at 5:50 PM
    I have initiated transfer out of a Deferred Annuity scheme in order to be able to access the tax-free sum.


    However, the original provider requires an IFA sign-off, which appears to come at great cost; hopefully not up-front.



    All I require is the sign-off, no advice - what's the best way to request the paperwork without incurring expensive work ? And minimise amount I lose.



    Thanks.
Page 1
    • Aegis
    • By Aegis 15th Nov 19, 6:07 PM
    • 5,143 Posts
    • 3,512 Thanks
    Aegis
    • #2
    • 15th Nov 19, 6:07 PM
    • #2
    • 15th Nov 19, 6:07 PM
    I have initiated transfer out of a Deferred Annuity scheme in order to be able to access the tax-free sum.


    However, the original provider requires an IFA sign-off, which appears to come at great cost; hopefully not up-front.



    All I require is the sign-off, no advice - what's the best way to request the paperwork without incurring expensive work ? And minimise amount I lose.



    Thanks.
    Originally posted by mwhit
    The sign off is a declaration that you have been issued advice. I don't know how you could possibly get some form of sign-off without receiving the advice except from someone of dubious professional ethics.
    I am an Independent Financial Adviser
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
    • SonOf
    • By SonOf 15th Nov 19, 6:26 PM
    • 1,918 Posts
    • 2,165 Thanks
    SonOf
    • #3
    • 15th Nov 19, 6:26 PM
    • #3
    • 15th Nov 19, 6:26 PM
    However, the original provider requires an IFA sign-off, which appears to come at great cost; hopefully not up-front.
    Advice on that basis would require payment as a single amount. Although if the pension is transferred to a provider that the IFA uses then it can come from the pension. If not, you need to pay it.

    All I require is the sign-off, no advice
    Wrong. The "sign-off" is to confirm that you have been given advice.

    what's the best way to request the paperwork without incurring expensive work ?
    The work will be required to enable advice to be given.
    • Brynsam
    • By Brynsam 15th Nov 19, 6:42 PM
    • 2,402 Posts
    • 1,817 Thanks
    Brynsam
    • #4
    • 15th Nov 19, 6:42 PM
    • #4
    • 15th Nov 19, 6:42 PM
    Expect to pay upwards of £5K + VAT. Even then, be aware that it is highly unlikely the IFA will recommend that you do transfer. Will your SIPP accept transfers from an 'insistent client', which is what you would be?
    • ZingPowZing
    • By ZingPowZing 15th Nov 19, 6:46 PM
    • 306 Posts
    • 128 Thanks
    ZingPowZing
    • #5
    • 15th Nov 19, 6:46 PM
    • #5
    • 15th Nov 19, 6:46 PM
    Welcome to the wonderful world of financial advice.
    • Aegis
    • By Aegis 15th Nov 19, 7:17 PM
    • 5,143 Posts
    • 3,512 Thanks
    Aegis
    • #6
    • 15th Nov 19, 7:17 PM
    • #6
    • 15th Nov 19, 7:17 PM
    Welcome to the wonderful world of financial advice.
    Originally posted by ZingPowZing
    You can blame the regulators for this one. As far as I'm aware, no advisers lobbied for this, nor do most of us agree that this should be necessary. I'd prefer to only deal with people that actually want advice rather than being forced into it.
    I am an Independent Financial Adviser
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
    • enthusiasticsaver
    • By enthusiasticsaver 15th Nov 19, 11:12 PM
    • 9,610 Posts
    • 22,332 Thanks
    enthusiasticsaver
    • #7
    • 15th Nov 19, 11:12 PM
    • #7
    • 15th Nov 19, 11:12 PM
    You won't get an IFA to sign off on it and you need a pension transfer specialist anyway. Due to the expense, poor transfer value and difficulty in finding a pension transfer specialist willing to sign it off I opted to keep my deferred Defined Benefit scheme. Is it really a deferred Annuity scheme?
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • cloud_dog
    • By cloud_dog 16th Nov 19, 9:38 AM
    • 4,646 Posts
    • 2,922 Thanks
    cloud_dog
    • #8
    • 16th Nov 19, 9:38 AM
    • #8
    • 16th Nov 19, 9:38 AM
    Whilst I'm not advocating for the transfer blindly didn't our balanced poster above (Zing) identify a possibly cheaper option than the cost mentioned above?

    That was to engage HL incurring the review cost only, irrespective of the recommendation. The point for the OP to be aware of is that whilst HL will provide the report they will not sign any third party forms confirming this so, you would need to confirm with the receiving provider if this is acceptable.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • ZingPowZing
    • By ZingPowZing 16th Nov 19, 11:02 AM
    • 306 Posts
    • 128 Thanks
    ZingPowZing
    • #9
    • 16th Nov 19, 11:02 AM
    • #9
    • 16th Nov 19, 11:02 AM
    Whilst I'm not advocating for the transfer blindly didn't our balanced poster above (Zing) identify a possibly cheaper option than the cost mentioned above?

    That was to engage HL incurring the review cost only, irrespective of the recommendation. The point for the OP to be aware of is that whilst HL will provide the report they will not sign any third party forms confirming this so, you would need to confirm with the receiving provider if this is acceptable.
    Originally posted by cloud_dog
    Don't use Hargreaves Lansdown, that would be the worst possible choice.

    Firstly, they will charge you £1500 for the analysis, then, as you need proof that they provided advice, they will charge you a further 2% of the transfer value for a report (add VAT in both cases). After the report (they will recommend you do not transfer, due to future liability considerations) you will be up against a CETV deadline trying to find an alternative provider, which would have to be AJ Bell, I believe, as HL would have washed their hands of you.

    You really wouldn't wish "The Hargreaves Lansdown Experience" on your worst enemy.
    • john-306
    • By john-306 16th Nov 19, 4:02 PM
    • 642 Posts
    • 138 Thanks
    john-306
    Expect to pay upwards of £5K + VAT. Even then, be aware that it is highly unlikely the IFA will recommend that you do transfer. Will your SIPP accept transfers from an 'insistent client', which is what you would be?
    Originally posted by Brynsam

    Do they really that much?
    The wife and I are looking to transfer out of BD schemes in the next year or so, but didn't realise the cost would be that high, one of my 2 DB pensions has only 32k in it.
    • ZingPowZing
    • By ZingPowZing 16th Nov 19, 4:21 PM
    • 306 Posts
    • 128 Thanks
    ZingPowZing
    Do they really that much?
    The wife and I are looking to transfer out of BD schemes in the next year or so, but didn't realise the cost would be that high, one of my 2 DB pensions has only 32k in it.
    Originally posted by john-306
    It's a racket.
    The industry is paranoid about potential future claims against it for giving out wrong advice, so the very expensive advice the client is compelled by law to buy may be worse than useless, if the first duty of the financial adviser is to protect himself.
    • Thrugelmir
    • By Thrugelmir 16th Nov 19, 4:41 PM
    • 65,931 Posts
    • 58,034 Thanks
    Thrugelmir
    The industry is paranoid about potential future claims against it for giving out wrong advice, so the very expensive advice the client is compelled by law to buy may be worse than useless,
    Originally posted by ZingPowZing
    The FCA is unhappy with the quality of advice being given in the majority of cases. Hence the industry contracting. As a consequence PI costs are rising, It's insurance companies that will be footing the bill. Those most involved will be well out of sight.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • ZingPowZing
    • By ZingPowZing 16th Nov 19, 4:48 PM
    • 306 Posts
    • 128 Thanks
    ZingPowZing
    When I say, "wrong advice", I mean wrong advice in hindsight.
    So, much safer to advise do nothing.

    Qed : https://forums.moneysavingexpert.com/showthread.php?t=6070170

    " since June they have just been sitting there un-invested in the SIPP as a cash amount for pretty much half a year. This is being eaten away by management charges and gaining no interest.

    I gather the original adviser left the company, and I got a new guy who seems to be struggling with his workload. He was talking about sorting out my wife's transfer into her SIPP and also starting to get mine invested 'a bit at a time' given current volatility in markets over brexit."
    The advisor has been in touch to apologize and ask if there is any way to remediate the situation. Discussed reducing fees, and other forms of compensation.
    He still claims however that being out of the market is doing no harm,"

    Go figure.
    • SonOf
    • By SonOf 16th Nov 19, 7:35 PM
    • 1,918 Posts
    • 2,165 Thanks
    SonOf
    Do they really that much?
    Only around 1 in 10 IFAs do DB transfers (it requires higher qualifications and significantly higher costs). it is also one of the highest risk transactions an adviser can carry out and is the current hot potato.

    The FCA considers it missold unless proven otherwise and overall they feel around 9 in 10 people are best left in the DB scheme.
    Last edited by SonOf; 17-11-2019 at 2:12 PM. Reason: correct due to typo
    • ZingPowZing
    • By ZingPowZing 16th Nov 19, 8:48 PM
    • 306 Posts
    • 128 Thanks
    ZingPowZing
    Only around 1 in 10 IFAs do DB transfers (it requires higher qualifications and significantly higher costs). it is also one of the highest risk transactions an adviser can carry out and is the current hot potato.

    The FCA considers it missold unless proven otherwise and overall they feel around 1 in 10 people are best left in the DB scheme.
    Originally posted by SonOf
    SonOf means 1 in 10 are best served leaving a DB scheme.

    Further to this:
    The FCA surveyed 3,015 firms and found that between April 2015 and September 2018:

    2,426 firms had provided advice on transferring their DB pension.
    234,951 scheme members had received advice on transferring.
    Of those 162,047 members had been recommended to transfer out and 72,904 had been recommended not to transfer.
    The total value of DB pensions where transfer advice had been provided was £82.8bn with an average value of £352,303.
    1,454 firms had recommended 75% of more of their clients to transfer. One reason a firm may be recommending a large number of clients to transfer is if the firm has a robust initial guidance service triaging clients. 1,346 firms reported data on the total number of clients who had not proceed past the firm’s initial guidance. The total number of clients reported as not proceeding to advice was 59,086. When these triaged clients are factored in 55% of clients were recommended to transfer.

    The idea of compelling clients to buy expensive advice from a financial adviser was a worthy one, but it only works if the adviser is acting for the client rather than himself.
    Last edited by ZingPowZing; 16-11-2019 at 8:52 PM.
    • Thrugelmir
    • By Thrugelmir 16th Nov 19, 11:19 PM
    • 65,931 Posts
    • 58,034 Thanks
    Thrugelmir
    The idea of compelling clients to buy expensive advice from a financial adviser was a worthy one, but it only works if the adviser is acting for the client rather than himself.
    Originally posted by ZingPowZing
    The client more often or not already has has a fixed objective in their heads. Swayed by lack of understanding of how unforgiving stock markets can be. After all what could possibly go wrong? From mortgage brokers, to property solicitors, to used car sales man, to double glazing salesmen, these never been a shortage of people happy to abuse their position and peoples trust.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • soulsaver
    • By soulsaver 16th Nov 19, 11:20 PM
    • 2,586 Posts
    • 1,300 Thanks
    soulsaver
    Search for a better deal.
    Unbiased.co.uk.
    And Bark.
    A couple of years ago I transferred a CETV £300k+ DB scheme for £2.5K inc VAT paid from the pension, going to my choice of platform.

    And I've seen better deals reported since - it wasn't who I used but you could try these - https://www.first-equitable.co.uk/final-salary-pension-transfer-advice/
    • john-306
    • By john-306 17th Nov 19, 10:46 AM
    • 642 Posts
    • 138 Thanks
    john-306
    Search for a better deal.
    Unbiased.co.uk.
    And Bark.
    A couple of years ago I transferred a CETV £300k+ DB scheme for £2.5K inc VAT paid from the pension, going to my choice of platform.

    And I've seen better deals reported since - it wasn't who I used but you could try these - https://www.first-equitable.co.uk/final-salary-pension-transfer-advice/
    Originally posted by soulsaver

    That's a good price at around less than 1% fee.
    But my 32k CETV (which unfortunately for me is over the 30k limit) costing the same would eat up 8% of mine
    So much for taking more control of your own pension.
    • AlanP
    • By AlanP 17th Nov 19, 7:41 PM
    • 1,764 Posts
    • 1,414 Thanks
    AlanP
    That's a good price at around less than 1% fee.
    But my 32k CETV (which unfortunately for me is over the 30k limit) costing the same would eat up 8% of mine
    So much for taking more control of your own pension.
    Originally posted by john-306
    If you have enough years left before scheme retirement age keep asking for the CETV as often as you can with no charge.

    If it falls you will be under the £30k advice limit, if it increases you'll have a bit more of a margin but unfortunately you are in the zone where it probably isn't cost effective to transfer.

    What annual pension does it pay, is a transfer even a reasonable idea.
    • wjr4
    • By wjr4 18th Nov 19, 9:20 AM
    • 616 Posts
    • 433 Thanks
    wjr4
    So much for taking more control of your own pension.
    Originally posted by john-306
    This is in relation to Defined Contribution pensions, not Defined Benefit pensions.
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