Low-Cost DB Pension Transfer Advice: Our Top Tips for Defined Benefit Transfer to SIPP

The reason for the high cost of pension transfers is that the entire regulated Independent Financial Advisor firm must follow strict FCA regulations for all DB transfers. Following the regulations, the IFA needs to spend an average of 120 – 180 hours to complete the DB transfer process.

The amount of work that goes into it is extremely complicated. So, when you come to us for advice, you will notice the amount of chasing and hustling that goes on in the background with your UK Ceding plan.

It’s also important to bear in mind that this is only going to become worse as of November 30th, 2021, when the UK government effectively removes your statutory right to transfer your pension. Anyone living outside the UK will almost always be flagged as an amber flag, indicating that there is a high chance of it being a pension scam. 

In addition, when finalizing your pension transfer, the IFA needs to foot the bill for professional indemnity (PI) insurance. Time after time, the price continues to rise. For this combination of reasons, it consumes a lot of time for everyone involved in the transfer process. We have written an article outlining why pension transfers are so expensive and have a detailed video here explaining it.

How Can You Save Your Money on the DB Pension Transfer?

In our industry, the cost is always a tricky issue. Clients will always demand the lowest possible price, however as repeatedly stated, the process requires a great deal of outstanding effort.

However, higher prices do not always signal that there is no way to reduce the rate or receive any kind of discount. Making a commitment, maintaining a positive relationship with your IFA, and referring others can all help clients potentially secure a discount from their IFA.

Do Your Homework Correctly

Most IFAs will give you a transfer discount if you can demonstrate that you are well-educated and informed about the issue, as well as that you will not be a difficult client to work with.  One difficulty is that people are busy; they have jobs, they have a vacation, and when the paper arrives on DocuSign, they will most likely want to go through it all. 

Being on time is also advantageous to both the IFA and you as the client. Nowadays, most IFAs provide the papers using Docusign, which greatly speeds up the process. Some clients sign the documents in two minutes and the paperwork is returned.

Make A Commitment

Committing to your financial adviser is one of the most important things you can do to create a long-term advantageous environment for both you and your IFA.

So, if you can tell your financial adviser from the start that you are committed to seeking the best advice possible in your retirement planning and investment resources, they will be much more motivated to do the best job possible for you. Also, your commitment allows the financial adviser to tell the compliance department to consider your commitment to excellence when considering any future compensation incentives. 

Build A Trustworthy Relation with Your IFA

Building a good relationship with your IFA takes time, but once one is established it could help you avoid financial pitfalls and will also benefit you during the advisory process in terms of cost, choice, and even speed.

If you believe anything is incorrect, you don’t understand something, you are unsure about a fee, or if you have any other questions, try to get them answered early on so that you can develop a trustworthy relationship with your financial adviser.

Refer Your IFA to Your Colleagues

At Cameron James, we work on an ongoing basis. Our annual fee of one percent is discounted by ten points for each successful referral of friends or colleagues. We now have a handful of clients who are down to 20 or 30 points and have referred six or seven new clients to us. This is highly beneficial to us, therefore in return, we can offer you a discount. 

We need to spend a little less on marketing if we receive the client as a referral from you or if you introduce the client to us. So, it’s simply taking money out of our marketing budget and putting it back into your wallet in the form of lower rates.

Your Pension Transfer Process is A Time Game

Transferring your DB pension is a time game since your CETV is fixed. For example, if you received your CETV on January 1st from your UK ceding scheme, you only have three months to decide and complete your pension transfer and send in all the paperwork. Your time continues to tick and in that three-month period, the UK ceding scheme can assess it and begin processing your transfer. 

If you complete your ‘homework’ correctly, the timeline will be shorter than three months. However, if you work with someone who makes mistakes, is unsure of what they’re doing, and does not have a dedicated chasing team for these UK ceding schemes, the transfer will take much longer.

The longer you wait to complete your pension transfer, the less likely you are to reap the benefits of your investment. Consider the market’s average returns.

If you chose an S&P 500 tracker, the average return over 30 years is 10% per annum. So, if your transfer takes three months longer, and you work with someone who isn’t particularly competent at it, you lose two and a half percent in investment growth. If it takes six months longer, you will lose about 5% of your investment growth.

We would not claim that Cameron James offers the most affordable pension process on the market, but we always prioritize your interests. For clients, this guarantees that you are the only entity that hires us; we will always be upfront, and we will avoid any bias or incentives from third parties. From the process perspective, this means that the transfer will take place as quickly and efficiently as possible.

Because you are the client and pay our IFA directly, you are protected from them doing anything against your best interests when they are investing in the products they sell you and we, therefore, treat this apparent conflict of interest with the upmost priority when it comes to client servicing.

Cameron James - Your Trustworthy Pension Transfer Specialist

Cameron James – Expat Financial Planning is the preferred independent financial adviser for International SIPP transfers. With over 10 years’  experience in transferring pensions, Cameron James is now servicing clients in 26 countries. 

We have the qualifications and technical knowledge required to help you transfer to an international SIPP both as an expat and US resident. Our mission is to bring regulated and transparent advice to our clients. As such, our clients fully understand how much their advice will cost in advance, with no hidden fees.

Cameron James – Expat Financial Planning has a sophisticated cash flow management system in place. Our senior management team has a decade of expertise serving expats and is committed to continuing to serve the requirements of expats for decades to come.

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