Realistic maximum charge for ongoing Pension transfer ?

[alscar]

Morning

I am looking at a relatively large total transfer from my DB scheme to a new pot.
On an on-going annual basis what do the more learned on here think should be the absolute maximum percentage I should be paying as a percentage of pot -1% ?
Ideally I would pay a minimum of x and then a " bonus " based on returns in excess of a minimum expected although a more simplistic maximum might appear to be the only answer.

Appreciate thoughts.

[JulianPH]

alscar said:

Morning

I am looking at a relatively large total transfer from my DB scheme to a new pot.
On an on-going annual basis what do the more learned on here think should be the absolute maximum percentage I should be paying as a percentage of pot -1% ?
Ideally I would pay a minimum of x and then a " bonus " based on returns in excess of a minimum expected although a more simplistic maximum might appear to be the only answer.

Appreciate thoughts.

Morning

If you are talking about the advice charge for the transfer then 3% of the value of the pot is the rule of thumb, but the ranges is often 2% to 4%.

For the ongoing advice fee 1% a year of the value of the pot is quite normal, but with a large pot you may be able to negotiate this down to perhaps even 0.5%.

You will be highly unlikely to find an IFA who will work on an ongoing basis for a bonus based on returns in excess of a minimum expected, as the adviser has not influence or control on the selected fund(s) performance whatsoever.

This is also a reason why you should question paying an IFA a percentage of your entire pension fund each and every year (regardless of whether this goes up or down) in any event. It is not ask they have any money in the game.

You will of course have the underlying investment charges (from the people actually running your money) and any platform and/or discretionary fund management costs your IFA throws into the mix.

You need to factor in the impact of all these charges to see how they will eat into your pension fund, regardless of market rises and falls, as you only get a positive investment return after these charges have been paid.

Even when markets fall and you lose money your IFA will still get paid their slice.

So I would look for an adviser who will offer you the best initial charge on the transfer and then look at a low cost investment solution for the money going forward.

[alscar]

Julian ,many thanks for your rapid response.
All points noted.
Fwiw there will be no charge for any pre transfer advice ( I am an existing client although not with any Pensions Pot ) - its the annual charge thereafter which was suggested as being 2%.