Fixed Fee/Reasonably Priced IFA
Discussion
Hi All.
Can anybody recommend me a decent IFA willing to work for a fixed fee rather than commission (or even offering a deal on the commission would be fine)? I'm in Edinburgh but I guess geographic location is not that important for this.
Situation is that I currently have a SIPP with HL with a modest amount in it - I am also in a final salary pension scheme and have been offered a healthy amount to come out of the scheme and I want to put this into my existing SIPP.
Not wanting to sound a know-it-all but I have worked in the industry for 25 years so I'm pretty confident I know what I am doing but getting advice is mandatory - I am just not keen to pay £10k for it when it's really just a box ticking exercise as far as I am concerned...
Cheers, Mike.
Can anybody recommend me a decent IFA willing to work for a fixed fee rather than commission (or even offering a deal on the commission would be fine)? I'm in Edinburgh but I guess geographic location is not that important for this.
Situation is that I currently have a SIPP with HL with a modest amount in it - I am also in a final salary pension scheme and have been offered a healthy amount to come out of the scheme and I want to put this into my existing SIPP.
Not wanting to sound a know-it-all but I have worked in the industry for 25 years so I'm pretty confident I know what I am doing but getting advice is mandatory - I am just not keen to pay £10k for it when it's really just a box ticking exercise as far as I am concerned...
Cheers, Mike.
This is something of a recurring question here.
The reality is that this is a complex area, and:
1. There is a certain amount of work that will be necessary for the adviser to meet regulatory requirements let alone professional standards
2. There will be other work required for the adviser to meet the requirements of their Professional Indemnity cover
3. The fee will (in some way) incorporate a "risk-based" element as this type of business has a long tail
You will likely have to accept and respect these points. There may be scope for a conversation with the IFA regarding the scope of services - if only to be sure that what you are being quoted for doesn't extend beyond what you need.
The onerous regulation in the pension transfers area is well intended. It is quite possible that there are aspects you haven't considered. You won't discover these without following the type of process that an adviser will use.
The reality is that this is a complex area, and:
1. There is a certain amount of work that will be necessary for the adviser to meet regulatory requirements let alone professional standards
2. There will be other work required for the adviser to meet the requirements of their Professional Indemnity cover
3. The fee will (in some way) incorporate a "risk-based" element as this type of business has a long tail
You will likely have to accept and respect these points. There may be scope for a conversation with the IFA regarding the scope of services - if only to be sure that what you are being quoted for doesn't extend beyond what you need.
The onerous regulation in the pension transfers area is well intended. It is quite possible that there are aspects you haven't considered. You won't discover these without following the type of process that an adviser will use.
I asked the exact same question a few months ago. I'm also in the pensions "industry" and used to spend several hours every day calculating CETVs when I started my career.
I'm happy I understand the risks involved in transferring in sufficient detail to be able to make a decision without advice, although I'm not an IFA so I don't know the day-to-day nuts and bolts involved in taking a CETV.
In the end, given the cost of advice, I decided it wasn't worth it and left the relatively small DB pension where it is rather than transfer it to my SIPP.
I'm happy I understand the risks involved in transferring in sufficient detail to be able to make a decision without advice, although I'm not an IFA so I don't know the day-to-day nuts and bolts involved in taking a CETV.
In the end, given the cost of advice, I decided it wasn't worth it and left the relatively small DB pension where it is rather than transfer it to my SIPP.
DibblyDobbler said:
Thanks that's helpful. I'm not expecting anybody to do it for free but the first little bit of investigation I did seemed to indicate charges totalling about £10k which took me aback.
Reckon it's just a case of shopping around a bit to see what the local IFAs offer ?
How exactly do IFA's propose clients pay £10k in fees? Direct cash payment? SIngle lump sum? Spread over time?Reckon it's just a case of shopping around a bit to see what the local IFAs offer ?
Genuinely interested
Sorry if off topic OP!
Sarnie said:
How exactly do IFA's propose clients pay £10k in fees? Direct cash payment? SIngle lump sum? Spread over time?
Genuinely interested
Sorry if off topic OP!
No problem - well the first one I looked into (it may not be typical) wanted £1.5k up front for a review then a percentage of the fund being transferred - I am fortunate in that it's a sizeable sum so the total commission (oops I mean 'charges' Genuinely interested
Sorry if off topic OP!
) was getting on for £10k which seemed a lot of money for helping me on a course of action which I have already decided to take!If there are any financial industry pros reading this who want to learn more about the latest thinking behind DB transfers, I have organised this free to attend event.
https://www.eventbrite.co.uk/e/the-great-pension-t...
https://www.eventbrite.co.uk/e/the-great-pension-t...
Ginge R said:
If there are any financial industry pros reading this who want to learn more about the latest thinking behind DB transfers, I have organised this free to attend event.
https://www.eventbrite.co.uk/e/the-great-pension-t...
Are you not interested in some easy money Al?! https://www.eventbrite.co.uk/e/the-great-pension-t...
Sarnie said:
It was Dale, not me
Agh, my bad. Sorry.DibblyDobbler said:
Cheers Al - I have a chum who is a pensions actuary who is looking at the numbers. Will have a ponder once he comes back to me but will not be rushing into anything
Good stuff. I'm sure you've got it all squared away. There are so many more facets to transferring these days, than doing a TVAS and totting up the Critical Yield. First rule of thumb when considering transfers, “primum non nocere”.. "first, do no harm.I got in this evening, and voted.. just twenty minutes ago. I stood there for two minutes, thinking. As I mulled over the names, there was one thing that I realised. I never heard those three words from any candidate. Instead, promises of action abound. “If elected, I will do this/that" etc etc ad nauseum.
Because doing something sells. Because promises sell. Action sells. Thoughtful analysis and exercising restraint however, does not. And so we are all ultimately left with many deeply flawed policies and decisions and much voter regret. If May gets in, whatever happens, one thing's certain. There'll be an opposite and equal reaction in ten or twenty years. Because doing something (*anything!!*) is often deemed to be better than doing nothing at all.
Everyone is different, and so are their needs. So, don't be afraid of doing nothing. You're retired a long, long time. Primum non nocere.
Sarnie said:
How exactly do IFA's propose clients pay £10k in fees? Direct cash payment? SIngle lump sum? Spread over time?
Genuinely interested
Sorry if off topic OP!
Hi Liam Genuinely interested
Sorry if off topic OP!
A £333k pension pot at 3% initial is £10k. It is taken directly from the pension as a lump sum, exactly the same as commission was.
It is the 1% a year annual servicing fee you have to watch out for. Paid in exactly the same way (as commission) this starts off at £3,333 a year and (assuming the fund doubles in size every decade) increases to over £12k A YEAR 20 years in!
OP - The nature of DB transfer fees also reflects the ongoing liability on the adviser as much as the work involved, so whilst I think advisers do charge like a wounded rhino, this could be an example of fee justification.
Edited to add a ")"
Edited by JulianPH on Sunday 11th June 20:36
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