Why is Pension Transfer Advice So Expensive
Published / Last Updated on 02/07/2020
Most people should not give up their guaranteed, ‘gold plated’, defined benefit or safeguarded rights pension schemes unless they have real, overriding reasons to do so such as having enough other ‘secure’ guaranteed income in retirement, substantial amounts of other wealth, life shortening health conditions, financial stress and extremely difficulty that may affect your financial or mental wellbeing.
Your pension scheme carries all of the investment risk, inflation risk and annuity risk, you do not. It is a guaranteed pension usually with guaranteed inflationary increases and a spouses benefit on death.
Significant costs are incurred by financial advisers for regulatory fees, regulatory restrictions, ombudsman levies, financial services compensation scheme levies and insurance costs before even thinking about advice time, staff costs, office costs, all other business operational costs.
Then there are ‘ambulance chasers’ claims management companies stirring up claims when people simply jump on the compensation culture band wagon that drive up costs and compensation liabilities for all financial advisers.
