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  1. #1

    IFA Fees DB Transfer

    I am in the process of transferring two DB schemes which have multiples in excess of 35 times. My IFA has asked for 2% of each pot to advise on and sign the transfer forms!

    How is the size of the pot relevant to the fee charged? The effort to crunch numbers is the same whatever the size!

    I have been previously registered with AFBD, SFA, FSA, SEC, NFA and have managed OPM. I am as qualified to sign these forms as an IFA. I certainly will not pay a % fee and I am looking for a simple fixed fee based on effort expanded. Any options out there?/

  2. #2
    Having read some other threads I should add that I am transferring into a SIPP, which is already set-up and has had my DC pensions transferred into. There is not necessarily a fee trail for the IFA as I intend to make my own investment decisions. As I am not eligible for "private client" protection under FCA rules and am classified as an "experienced" investor, there must be considerably less liability for the IFA in my case?

  3. #3
    Liability. The larger the pot, the greater the risk to the adviser and the firm.

    Also, many of the costs an IFA faces are percentage based too. If you have been registered with the FSA (and I assume you mean the old FSA and not the food standards agency) then you would know this as the FCA, FSCS, FOS etc have all their levies on percentage basis for example. PI insurance is percentage based. Plus, PI insurance has a 1.7 million minimum set by FCA. If you are dealing in occupational pension transfers then you are likely to need far more than that. So, up goes that percentage again.

  4. #4
    What are these classifications you are referring to?

    There is Professional client, Retail client or eligible counterparty. The vast majority of people are classed as retail clients. If you dont meet the professional criteria then you will be retail.

    Retail means the IFA has the same liability whether you are clueless, highly knowledgeable or just think you are highly knowledgeable.

  5. #5
    An IFA isn't allowed just to crunch the numbers. They have to make a full assessment of whether the transfer is a suitable transaction for you to undertake based on your personal circumstances. Crunching the numbers is just the starting point.

    It's considered one of the most complex pieces of advice and is a regulated activity in itself of which advising on investments also usually forms a part. Advising you to transfer without taking account of all relevant information carries a large degree of risk for an adviser; equally, not advising you to transfer when it would be in your best interests carries risk too. This risk is priced into the charges you pay. Don't expect it to be a walkover that an adviser will agree to transfer for you - and do ask about their insistent client processes.

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