Final Salary Pension advice

Options
maggie62
maggie62 Posts: 6 Forumite
in Pensions, annuities & retirement planning
As a 55 year old female with health issues I am considering transferring out of my final salary pension and have obtained a CETV of £300k.

I have had a free initial meeting with an IFA who agrees that this is the best way forward, particularly as I also have a smaller final salary pension from a previous employer that starts to pay out when I turn 60.

If I instruct the IFA to provide initial services and advice for his quoted fees of £1000, but then his partner firm advises against transferring out, I'd like to know what my options would be.

Maggie
«13

Comments

  • Malthusian
    Malthusian Posts: 10,956 Forumite
    First Anniversary First Post Name Dropper Photogenic
    Options
    1) Take the IFA's advice.

    2) Transfer to a SIPP provider that accepts final salary transfers against advice. As far as I know there is only one. You will need to check that your IFA would be willing to sign the form confirming they had given advice; not all IFAs will do this as they fear being held liable later.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
    First Anniversary Name Dropper First Post
    Options
    What pension will you receive and what are the fees you'll pay if you take the CETV and do drawdown? How would the money be invested? The bottom line here is how much money do you need and the amount the final salary will provide and the amount that the invested CETV might provide?
    Has the IFA given you those numbers yet?
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • drphila
    drphila Posts: 289 Forumite
    Name Dropper First Anniversary First Post
    Options
    I am in the process of finding an IFA, myself.
    Malthusian wrote: »
    1) Take the IFA's advice.

    2) Transfer to a SIPP provider that accepts final salary transfers against advice. As far as I know there is only one. You will need to check that your IFA would be willing to sign the form confirming they had given advice; not all IFAs will do this as they fear being held liable later.

    Only one of the big providers (A J Bell) accepts against advice, but there are smaller ones (Close Bros, Xaffinity).

    As pointed out, you can do nothing without the form/letter so make sure the IFA will provide this if they advise against.

    Make sure also that the IFA can meet the deadline because if not a new quote value could easy drop by £5/10k.

    £1000 seems very cheap compared to the industry norm of several thousands of pounds. Check on the FCA site that he has Permissions for Pension Transfer.

    Since I am looking for an IFA myself, would it be possible for you to PM me his name?
  • Malthusian
    Malthusian Posts: 10,956 Forumite
    First Anniversary First Post Name Dropper Photogenic
    Options
    drphila wrote: »
    I
    £1000 seems very cheap compared to the industry norm of several thousands of pounds. Check on the FCA site that he has Permissions for Pension Transfer.

    I expect the £1,000 is just to provide the advice on whether to transfer out or not - what the OP describes as "the initial services and advice".

    If the IFA is also advising on and facilitiating the transfer to the new provider, you would expect further fees bringing it into the several thousands of pounds range.
  • maggie62
    maggie62 Posts: 6 Forumite
    Options
    Thanks for the replies everyone.

    Yes, the £1000 is only for the initial advice which seems to be a fairly standard fee.

    If the transfer takes place then further fees take the total cost close to £6000 or approximately 2% of the CETV.

    My main concern was spending £1000, being advised not to transfer out, and finding myself with no other options.

    Hopefully, taking into account my health issues, the transfer will proceed smoothly, but at least I now know that there are some firms that will accept transfers against advice,
  • C_Mababejive
    C_Mababejive Posts: 11,656 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Options
    What does the IFA actually do for this mega 1% or so fee?

    What is the difference in the "work" needed to transfer 600,000 compared to say , 300,000 ?

    I do think IFA charges for such services are excessive and they get away with it as they are the key holders.
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
  • LHW99
    LHW99 Posts: 4,244 Forumite
    First Anniversary Name Dropper First Post
    Options
    I suspect a good part will lie in the professional indemnity insurance required to cover advice on the larger pot
  • bigadaj
    bigadaj Posts: 11,531 Forumite
    Name Dropper First Post First Anniversary
    Options
    C_Mababejive wrote: »
    What does the IFA actually do for this mega 1% or so fee?

    What is the difference in the "work" needed to transfer 600,000 compared to say , 300,000 ?

    I do think IFA charges for such services are excessive and they get away with it as they are the key holders.

    Well if you see an opportunity dive on in.
  • Malthusian
    Malthusian Posts: 10,956 Forumite
    First Anniversary First Post Name Dropper Photogenic
    Options
    C_Mababejive wrote: »
    What is the difference in the "work" needed to transfer 600,000 compared to say , 300,000 ?

    Twice as much liability, people with more money typically have more complex needs, tax planning (Lifetime Allowance etc) is more complicated. Regulatory fees and professional indemnity costs all go up as assets under advice go up.

    And what makes you think it's all about cost? What is the difference in the work needed to carry a 31 year old on a train compared to transporting a 29 year old with a discount railcard on the same journey?

    As Bigadaj says, if you think you can do defined benefit transfer advice for £500 then go for it. You'd better hurry up because there's an absolute gold rush going on right now. If you offer DB transfer advice for £500 a throw you'll have clients beating down your door.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
    First Anniversary Name Dropper First Post
    edited 26 November 2017 at 1:41AM
    Options
    The requirement that advice be take on a transfer greater than 30k has the financial advisors running all the way to the bank. Not only do they take the advice fee, they then try to get some sort of on going charges for "management" or subcontracting to a "wealth manager". All this overhead seems well baked into the UK system and is justified by an industry that belittles the average investor and makes things seem as complicated as possible. The final insult is that the insurance seems to be necessary given the results of that recent report that a majority of retirees got "bad advice" - whatever that means.

    If people end up paying 1% or 2% in fees during drawdown then many UK retirees will be far poorer than they need to be.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.4K Banking & Borrowing
  • 250.2K Reduce Debt & Boost Income
  • 449.8K Spending & Discounts
  • 235.5K Work, Benefits & Business
  • 608.4K Mortgages, Homes & Bills
  • 173.2K Life & Family
  • 248.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards