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    • bigalxyz
    • By bigalxyz 8th Mar 18, 12:00 PM
    • 52Posts
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    bigalxyz
    Pension Planning...
    • #1
    • 8th Mar 18, 12:00 PM
    Pension Planning... 8th Mar 18 at 12:00 PM
    Hello forum,

    I'm in the middle of having a close look at my pension arrangements to look at the pros & cons of various options available to me.

    I've got a number of DB (final salary) and DC pension pots.

    My first thought was that I should leave the DB stuff where it is, and concentrate on the pros & cons of transferring my DC pots into a suitable low cost SIPP arrangement. Possible expense savings & more flexibility, etc.

    However I'm now thinking of looking at transferring out of the DB pots as well. Controversial topic and I gather some people have been given very iffy advice on this. In my particular case though (48yo, in quite poor health and unmarried), the value to me of the future DB pension might be quite a lot less than for the typical 48yo scheme member, which might tilt things in favour of a move out.

    A reputable IFA has quoted 2,000 for a full review of all this stuff (and various "lifestyle planning" type projections). I'm not sure if this is a competitive price - does anyone have any thoughts? At any rate I gather than for DB pots > 30k (which mine all are), IFA advice is mandatory before transferring out, so the option to weigh up the odds myself & make my own decision doesn't exist - so I'm probably going to have to pay *someone* a four figure sum!

    Is 2k a sensible price for this sort of thing?

    (IFA also punted other fees going forward for investment advice, etc. but I'll give all that a miss - I'm quite confident in my ability to do that stuff myself)

    Does anyone have any particular IFA recommendations (in terms of competitive prices and/or good quality advice)?

    Grateful for anybody's thoughts/comments.

    Thanks,
    A.
    Last edited by bigalxyz; 08-03-2018 at 12:40 PM.
Page 1
    • AlanP
    • By AlanP 8th Mar 18, 12:47 PM
    • 1,178 Posts
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    AlanP
    • #2
    • 8th Mar 18, 12:47 PM
    • #2
    • 8th Mar 18, 12:47 PM
    Just check that the 2k includes the analysis work required and that the IFA is qualified to the right level to advise on DB transfers - not all are.

    From your personal circumstances it sounds like a route worth exploring, the spouse benefit is a big one with DB schemes.

    You could mix & match - keep some DB, which with your SP, would give you enough for your essentials and transfer the rest possibly.

    2k sounds like a good price compared to many comments on here.
    • bigalxyz
    • By bigalxyz 8th Mar 18, 12:57 PM
    • 52 Posts
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    bigalxyz
    • #3
    • 8th Mar 18, 12:57 PM
    • #3
    • 8th Mar 18, 12:57 PM
    Thanks.

    Yes the 2k would include the analysis for all the DB and DC schemes. If it was DC alone I wouldn't bother but I guess the calcs for DB transfers are tricky and need careful consideration.

    As for the IFA being suitably qualified for this stuff - I would think so but I'm not sure. How could I check? (I could just ask him I suppose!)

    I note your comment re: 2k not being a bad price.

    Rgds
    Alan.
    • Brynsam
    • By Brynsam 8th Mar 18, 2:29 PM
    • 932 Posts
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    Brynsam
    • #4
    • 8th Mar 18, 2:29 PM
    • #4
    • 8th Mar 18, 2:29 PM

    As for the IFA being suitably qualified for this stuff - I would think so but I'm not sure. How could I check? (I could just ask him I suppose!)
    Originally posted by bigalxyz
    Check here: https://register.fca.org.uk/ShPo_Homepage If he isn't on the register he certainly can't give the advice - and the DB scheme from which you are trying to transfer will make their own independent check at the point of transfer, so really important to establish at the outset that he is on the register. If he isn't the transfer won't go through.
    • bigalxyz
    • By bigalxyz 8th Mar 18, 2:45 PM
    • 52 Posts
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    bigalxyz
    • #5
    • 8th Mar 18, 2:45 PM
    • #5
    • 8th Mar 18, 2:45 PM
    Thanks. The firm is on there yes -

    "Status: authorised
    This is a firm that is given permission to provide regulated products and services"
    • Linton
    • By Linton 8th Mar 18, 2:59 PM
    • 9,384 Posts
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    Linton
    • #6
    • 8th Mar 18, 2:59 PM
    • #6
    • 8th Mar 18, 2:59 PM
    Thanks. The firm is on there yes -

    "Status: authorised
    This is a firm that is given permission to provide regulated products and services"
    Originally posted by bigalxyz
    You need more than that. Under "Permission" it should say "Advising on pension transfers".
    • bigalxyz
    • By bigalxyz 8th Mar 18, 3:15 PM
    • 52 Posts
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    bigalxyz
    • #7
    • 8th Mar 18, 3:15 PM
    • #7
    • 8th Mar 18, 3:15 PM
    Ah ok...had a look and it says:

    ============

    Advising on Pension Transfers and Pension Opt Outs

    Customer Type
    Professional
    Retail (Investment)

    Investment Type
    Life Policy
    Personal pension scheme
    Rights to or interests in investments (Contractually Based Investments)
    Rights to or interests in investments (Security)
    Stakeholder pension scheme
    Unit

    Limitation
    Rights to or interests in (both).

    =============

    Is that all in order?
    • Brynsam
    • By Brynsam 8th Mar 18, 5:00 PM
    • 932 Posts
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    Brynsam
    • #8
    • 8th Mar 18, 5:00 PM
    • #8
    • 8th Mar 18, 5:00 PM
    Is the individual who will be giving the advice named on the register? He needs to be. Just having the firm's name isn't enough.
    • bigalxyz
    • By bigalxyz 8th Mar 18, 5:02 PM
    • 52 Posts
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    bigalxyz
    • #9
    • 8th Mar 18, 5:02 PM
    • #9
    • 8th Mar 18, 5:02 PM
    Yes - I've just checked and he's on there.
    • sandsy
    • By sandsy 8th Mar 18, 5:33 PM
    • 1,322 Posts
    • 796 Thanks
    sandsy
    Check if the 2000 actually includes the cost of implementing any transfer too. Some advisers charge a fee for all the analysis work then extra for actually carrying out transfer.

    (IFA also punted other fees going forward for investment advice, etc. but I'll give all that a miss - I'm quite confident in my ability to do that stuff myself)
    Originally posted by bigalxyz
    Many advisers won't advise people who want to manage their own funds. And if the recommended transfer is to a provider that only deals with IFAs, you may have to transfer again to manage it for yourself.
    • bigalxyz
    • By bigalxyz 8th Mar 18, 5:47 PM
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    bigalxyz
    The 2k fee is research/analysis/recommendations alone. Doesn't include any implentation work. If I wanted them to do that I'd have to pay them some more, but I think I can manage that myself fairly easily. Also doesn't include any ongoing investment advice.

    I haven't posed the question of whether or not they will advise me if I want to manage my own funds. That would be a deal breaker for me - I would walk away if they insist on managing the funds for me. Ain't paying for that when - again - I can do it myself.
    • LHW99
    • By LHW99 8th Mar 18, 9:30 PM
    • 1,282 Posts
    • 1,179 Thanks
    LHW99
    I haven't posed the question of whether or not they will advise me if I want to manage my own funds. That would be a deal breaker for me - I would walk away if they insist on managing the funds for me. Ain't paying for that when - again - I can do it myself.
    If they don't manage the funds after transfer it increases the risk, and it seems from comments on here that many IFA's won't advise.
    As Sandsy says, you may need to accept IFA management initially and consider a second transfer at a later date.
    • bigalxyz
    • By bigalxyz 8th Mar 18, 9:34 PM
    • 52 Posts
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    bigalxyz
    Oh boy. This is starting to feel like money for old rope!
    • dunstonh
    • By dunstonh 9th Mar 18, 1:20 AM
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    dunstonh
    Oh boy. This is starting to feel like money for old rope!
    Originally posted by bigalxyz
    Its a transaction that historically is considered unsuitable in 4 out of 5 cases. It is a transaction that the regulator considers missold unless proven otherwise. It is a transaction that costs advisers more (if they do them) in PI insurance. And they carry that liability for the life of the company (or their own life if self employed or partnership) as there is no time limit on complaining.

    The last time people went crazy with DB transfer which were no brainers to do, about 5 years later, it was decided that retrospectively, they were missold.

    That is why it costs money.
    Last edited by dunstonh; 09-03-2018 at 11:55 AM.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • bigalxyz
    • By bigalxyz 9th Mar 18, 11:42 AM
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    bigalxyz
    Fair enough. I know these exercises need to be done carefully and I understand (as a self employed contractor) that things like PI cover can be very costly in some cases, so I do get that a fairly substantial fee will be involved.

    The "can't advise without also implementing and managing" thing bothers me a great deal though. I've emailed the IFA just now to see if this is the case. I'll be a bit irritated if it is tbh. I don't really want to pay hefty fees for something I'd be quite confident of doing myself.

    Also sounds like scope for a conflict of interest perhaps, since if the best advice for the client is "leave everything where it is", an IFA who stands to gain from implementing and managing a new arrangement may be tempted to nudge the client in that direction without good reason. Maybe I'm mistaken, I don't know. I'm not an expert in these matters.
    • dunstonh
    • By dunstonh 9th Mar 18, 12:08 PM
    • 92,610 Posts
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    dunstonh
    The "can't advise without also implementing and managing" thing bothers me a great deal though. I've emailed the IFA just now to see if this is the case. I'll be a bit irritated if it is tbh. I don't really want to pay hefty fees for something I'd be quite confident of doing myself.
    An IFA is not allowed to insist on ongoing servicing. It has to be optional. However, the investment recommendation is going to be different in that scenario.

    However, there are some boutique advice firms that use the IFA tag incorrectly and are really FAs. They run one business model and insist you fit it. A number of these have moved to FA status (often after FCA intervention). If you get a firm like that who is referring to themselves as IFAs then avoid them.

    Also sounds like scope for a conflict of interest perhaps, since if the best advice for the client is "leave everything where it is", an IFA who stands to gain from implementing and managing a new arrangement may be tempted to nudge the client in that direction without good reason. Maybe I'm mistaken, I don't know. I'm not an expert in these matters.
    The way the FCA monitors DB transfers, it wouldnt be worth a genuine firm doing that. For example, at the end of 2018, the FCA is going to request the files for at least one DB transfer case of every advice firm out there (regardless of status). The FCA will pick the case. Not the firm. The problem area is the "pop up" type firm that is doing transfer advice on a factory line style basis. They will make hay while DB transfers are viable and then close down and dump the liability on the FSCS leaving the good firms to pick up the bill.

    Despite the negativity, the vast majority of firms are doing these fine. Its mainly costs and some are greedy. 2k to 5k is in the reasonable range.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • bigalxyz
    • By bigalxyz 9th Mar 18, 12:12 PM
    • 52 Posts
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    bigalxyz
    Thanks for taking the time to write all that - much appreciated.

    I'm playing email tennis with the IFA at the moment to get to the bottom of what exactly is on the table.

    Re: your point about "boutique" firms - how does one spot them? The company I'm talking to does come recommended by someone whose advice I trust, and seems to be well-liked in terms of online reviews, etc. but one can't be too careful!

    (I've deliberately not named them on here - I'm assuming that sort of thing is not really cricket on forums like this)
    Last edited by bigalxyz; 09-03-2018 at 12:15 PM.
    • bigalxyz
    • By bigalxyz 9th Mar 18, 12:33 PM
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    bigalxyz
    ok, IFA has confirmed that he won't advise on DB transfers without also managing the funds (and charging fees accordingly). 2k for advice stage, 5k for implementation of transfers to a new vehicle (if agreed to be worthwhile) and then an annual charge of about 1.25% thereafter. Not what I wanted! I think I'm going to politely decline and keep looking.
    • dunstonh
    • By dunstonh 9th Mar 18, 12:34 PM
    • 92,610 Posts
    • 59,921 Thanks
    dunstonh
    Re: your point about "boutique" firms - how does one spot them? The company I'm talking to does come recommended by someone whose advice I trust, and seems to be well-liked in terms of online reviews, etc. but one can't be too careful!
    Generalisations can always lead to errors......

    However, most boutique firms are slick in presentation (how the office looks, how the brochures look etc). If they run only one model, they can use a professional printing firm for the bulk of their literature. Whereas a general practitioner IFA wouldn't as they have so many different providers, products, funds, options etc that they have to rely on the office laser printer. They dont know if the next client through the door is going to end up with Aviva, Royal London, Aegon, Std Life or whoever or whatever. They dont know if it will be servicing or transactional. Whereas a boutique firm with one model knows exactly where they want to put that person. Boutique firms are universally expensive. All that gloss is being paid for out of client fees.

    They tend to use discretionary investment managers only. And will pour scorn on the thought of using a mainstream option or "just an IFA". If you are getting that tone, then be on guard.

    The wording tends to be wealth management with not as much focus, if any, on the fact they are IFAs (assuming they are IFAs). Almost trying to distance themselves.

    Now you know there are different advice models, you should be able to pick things up in the tone.

    All that said, just because a firm operates that way does not make them bad. There is one near us who is very honest and does an excellent job and is a stickler for presentation and he is very knowledgeable and would give me no concerns at all. I dont know how he can get away with using the IFA tag still (probably as no-one has told him not to). He is expensive but he focuses on the top end of the wealth market. It just seems that the boutique firms seem to be suffering more firms that are greedy and not really operating as an IFA but an FA.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • bigalxyz
    • By bigalxyz 12th Mar 18, 6:17 PM
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    bigalxyz
    Update: have found an IFA offering to advise on my 3 DB schemes for a total fee of 3,000. No obligation to then have him manage things thereafter - quite happy to see me set up my own SIPP if transfers are deemed worthwhile. Progress, perhaps...(still not cheap though!).
    Last edited by bigalxyz; 12-03-2018 at 6:20 PM.
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