Has anyone used an IFA for a pension transfer? The rules now are that anything over £30k needs their assessment (Financial Advice Declaration, a one-pager saying they’ve advised me), and it is not cheap.

Best I’ve heard so far is £1,800 (ex vat) flat fee, which is around 0.7%. And many higher.

Knowing how canny the STW crew are, has anyone done better?

The rules now are that anything over £30k needs their assessment (Financial Advice Declaration, a one-pager saying they’ve advised me),

Are you sure about that? I transferred c£50k in July last year, just me, no IFA

It depends on the company who you’re transfer it to AFAIK

It was also enough to put me off and just leave it where it was.

One of the first hits on Google says:

“Only those who want to convert their final salary scheme of more than £30,000 to a DC pension in order to access their money, or who has a pension with certain other “safeguarded benefits” (such as a guaranteed annuity rate) will have to prove they have taken independent financial advice first.“

Although the pension company may have misunderstood the rules.

Well, if you’re looking at converting a final scheme to a DC scheme, any IFA who can sleep at night will tell you not to.

Where you putting it?

Well, if you’re looking at converting a final scheme to a DC scheme, any IFA who can sleep at night will tell you not to.

Sharks don’t sleep.

Well, if you’re looking at converting a final scheme to a DC scheme, any IFA who can sleep at night will tell you not to.

That’s just received wisdom talking, it’s not that simple and depends upon many things. The transfer value of DB scheme benefits is at an all time high and can’t conceivably go much higher – if ever you were going to do it, now’s the time (though you need to have a firm grasp of what you’re doing and why).

That’s just received wisdom talking, it’s not that simple and depends upon many things.

That’s true, and entirely fair. It’s a pretty difficult and nuanced decision though, which is why getting good, impartial advice is important. Unfortunately, good and impartial are often elusive adjectives when it comes to IFAs.

FWIW, this

is £1,800 (ex vat) flat fee, which is around 0.7%.

sounds reasonable for good and impartial advice.

I bet there are lots of BHS Pensioners that wished they had transferred out of the scheme.

Yes db to dc transfer valuations are probably at an all time hi. I wouldnt do it but there are cases where it can be better in dc, i cant remember the detail but it was covered in an ft podcast last year.

This threads a bit like the father selling his btl and his 150k, lots of vested interest advice, some good, some poor. I like the diversifaction of several investments, you dont really know till after a long time which has won.

Article here explaining why a transfer from a DB can make sense.

Despite the wish of IFAs to offer good and impartial advice I’ve crunched the numbers and I’d prefer to get the one-page form filled as economically as possible.

I’m going to move the deferred pension to a Sipp. If I achieve 1.5% real return over the long run I’ll be ahead, which I think is doable. The first time I’ve seen achievable returns.

The trustees of the pension scheme want the form. Potentially it may say I shouldn’t transfer, but if so I can still insist and do it, depending on the attitude of the receiving scheme.

It seems ironic that to address the problems of those who, perhaps encouraged by unrealistic assumptions about returns offered by commission-led ‘free’ advisors, we are now obliged to pay the same group for fee-based advice, whether or not we need it.

Pension schemes have also assumed highly unrealistic rates of return until recently, which is why it didnt make sense to switch, and why so many company schemes have closed.

It takes me quite a while to earn the sort of money these IFAs charge, and I have the advantage that I already know my position.

is £1,800 (ex vat) flat fee, which is around 0.7%.

Our company pays for an IFA from a local FA company to advise us for free. His knowledge of pensions is quite shockingly poor. No idea how you qualify as an IFA, but it doesn’t seem to require any actual knowledge about financial products or law.

If it was me, I’d just forge the forms….

You won’t get any value for your £1800 +VAT.

I have a pension that was London Life and has now ended up with Dolphin (I think it is them) who collect up old pension schemes.

I want to transfer it into my SIPP but because it has some sort of asurance on it(death I thnk, mot worth much though) HL want me to get IFA advice before they will take it – which seems bloody stupid if I also have to pay that much for someone to agree with me that I should get it out of a poorly performing fund and into a decently performing SIPP.

You won’t get any value for your £1800 +VAT.

That’s not fair, there are good IFAs, the best specialise or have a number of people who specialise in the various areas they are expected to cover – there are actuaries who are also IFAs and they should know pensions backwards.

I want to transfer it into my SIPP but because it has some sort of asurance on it(death I thnk, mot worth much though) HL want me to get IFA advice before they will take it

They don’t want you to, it is probably what the law requires. A classic example of where overzealous regulation doesn’t achieve the intended result.

The rules are there to protect people from themselves. I think it’s a good idea having them there even if it is frustrating for some.

If it was me, I’d just forge the forms

The receiving scheme will likely want something on letter headed paper from the IFA as well as confirmation of their FCA reference. Not sure how you fake that.

Our company pays for an IFA from a local FA company to advise us for free. His knowledge of pensions is quite shockingly poor. No idea how you qualify as an IFA, but it doesn’t seem to require any actual knowledge about financial products or law.

minimum needed is a diploma (6 exams), but to be advising on pension transfers you (or under guidance) need to have pension transfer specialist exam, which is one of the Chartered exams most decent advisers will take.

£1,800 sounds reasonable. They will be a lot of work involved.

It’s the scheme where your benefits are now, if it’s a defined benefits scheme, which must, by law, see a statement confirming you’ve received advice – the statement must contain specific information, laid out in the relevant statutory instrument.

Unfortunately, 30 years working with defined benefit schemes gives me a very low opinion of IFAs in regard to their understanding of defined benefit pensions. But if you’ve made the decision and advice wouldn’t sway you, I guess the quality of the advice is irrelevant, and I don’t doubt that there are adviser who will oblige – the charge is because (1) they can no longer take commission and (2) someone’s got to pay their Professional Indemnity insurance. When I was authorised under FIMBRA (which dates it somewhat), we got 6.4% on transfers, which isn’t far off the £1800 if it’s only £30,000.

>>… I transferred c£50k in July last year, just me, no IFA

Hi, sorry if this is hijacking this thread but curious about the above statement. How tricky was it? Was much specialist knowledge required? I am looking at trying to escape from a provider with some high charges and exit penalties and so I am trying to keep the costs down. Thanks!

@hebdenbiker presumably you’re in a DC arrangement not DB/final salary since you’re talking about costs. They are a lot easier to move without advice. Check out Hargreaves lansdowne if you really don’t want to take advice, although the charges will be much lower than a DB transfer would cost.

However, if there are high exit charges you may be better to wait until after March as the new FSA rules in capped exit charges comes into being and will reduce exit charges to a max of 1% I think, unless you are with st James place who seem to think it doesn’t apply to them, not sure of the background to that one.