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 must spend an average of 120 – 180 hours completing the DB transfer process.

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

It’s also essential to bear in mind that this will only worsen 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 a high chance of being a pension scam.

In addition, the IFA needs to foot the bill for professional indemnity (PI) insurance to finalise your pension transfer. Time after time, the price continues to rise. Combining these reasons consumes a lot of time for everyone involved in the transfer process. We had written an article outlining why pension transfers are so highly-priced and have an extensive video here explaining it. 

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

In the UK Pension Transfer 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 or gain any discount. Making a commitment, maintaining a positive relationship with your IFA, and referring others can help some clients earn a discount from their IFA.

Do Your Homework Correctly

Most IFAs will give you a transfer discount if you demonstrate that you are well-educated and informed about the issue and will not be challenged. One difficulty is that people are busy; they have jobs and vacations, 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 yourself. Nowadays, most IFAs provide the papers using Docusign, which significantly speeds up the process. Some clients return items in two minutes, and the paperwork is returned.

Make A Commitment

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

So, suppose you can tell your financial advisor from the start that you are committed to seeking the best advice in your retirement planning and investment resources. In that case, they will be much more motivated to do the best job possible for you. Your commitment also allows the financial advisor to tell the compliance department to consider your commitment to excellence when considering 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 benefit your advising process in terms of cost, choice, and even speed.

If you believe anything is incorrect, don’t understand something, are unsure about a fee, or have any other questions, try to have as many of them answered early on to develop a trustworthy relationship with your financial advisor.

Refer Your IFA to Your Colleagues

At Cameron James, we work on an ongoing basis. Ten basis points discount our annual fee of one percent for each successful introduction of friends or colleagues. We now have a handful of clients who are down to 20 or 30 basis points and have referred us to six or seven new clients. This is highly significant to us. Therefore, we can offer you a discount.

We have to spend a little less on promotion if we receive the client from you or if you introduce the client. So, it’s simply taking money out of a marketing budget and putting it back into your wallet at 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 it on January 1st, your UK Ceding Scheme sent your CETV, you only have three months to decide and complete your pension transfer and send in all the paperwork. Your time continues to tick; within three months, 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 will 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 exceptionally competent, you lose two and a half percent in investment growth. You will lose about 5% of your investment growth if it takes six months longer.

We would not claim that Cameron James offers the most affordable pension process on the market, but we always prioritise 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 occur as quickly and efficiently as possible, with fewer mistakes in the paperwork.

Because you are the client and pay our IFA directly, you are protected from them doing anything against your best interests when invested in the products they sell you. We, therefore, give this apparent conflict of interest the highest priority in our client servicing.

Cameron James - Your Trustworthy Pension Transfer Specialist

Cameron James is the preferred independent financial adviser for International SIPP transfers. With over ten years of experience transferring pensions, Cameron James now serves clients in 26 countries.

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

We have a sophisticated cash flow management system. 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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