Retirement planning services and what firms charge for them

How to establish what you are buying

1. Ask which decision is being advised on. A defined benefit transfer, a drawdown strategy and an inheritance plan are separate pieces of work. A quotation that does not name the decision is a quotation for an unbounded job and cannot be compared with anything.
2. Separate initial from ongoing. Ask for the initial fee in pounds and the ongoing fee as both a percentage and a pound figure on your own pot. An ongoing charge is the larger number over a retirement and it is the one most often quoted only as a percentage.
3. Ask what the ongoing fee buys. A yearly review, a rebalancing service and a cashflow model are different commitments. Ask how many meetings, what is produced and what happens in a year when nothing changes, because that is the year the fee is hardest to justify.
4. Check the permissions match the job. Advising on a defined benefit transfer needs a specific permission. Confirm on the FCA register that the firm holds the permission for the work you actually need, not merely that it is authorised for something.

The three things sold under one heading

The first is transactional advice: one decision, one report, one fee. The second is ongoing advice, where a firm manages a plan and charges every year for doing so. The third is guidance rather than advice, which explains options without making a personal recommendation and carries no regulatory responsibility for the outcome.

The distinction matters because only the second creates a recurring cost and only the first two carry a right of complaint about the recommendation itself. Establishing which one is on offer is the most useful question you can ask, and it is usually answered in the first ten minutes.

How the fee is normally built

Most firms quote an initial fee for the work of understanding your position and making a recommendation, then an ongoing fee for keeping it under review. The initial fee may be a flat sum or a percentage of the money being advised on. The ongoing fee is almost always a percentage of the money under management.

A percentage that sounds small is a large sum on a large pot and it repeats. Asking for the ongoing figure in pounds, on your own pot, at today's value, is the single change that makes two quotations comparable, and a firm that will not put it that way is telling you something useful.

What is regulated and what this site does

Personal recommendations about pensions and investments are regulated activities in the United Kingdom, and they may only be given by an authorised firm. GOV.UK's own guidance on planning retirement income sets out the decisions involved and where free impartial help is available.

This site is not an adviser. It explains how the market charges, and where you ask, it passes the enquiry to an authorised firm and is paid as an introducer for doing so. It does not advise, does not arrange, does not steer you to a particular firm and holds no client money.

Common questions

What is the difference between advice and guidance?

Advice is a personal recommendation about what you should do, given by an authorised firm and carrying responsibility for its suitability. Guidance explains the options without recommending one. Guidance is often free, advice is not, and only advice gives you a route of complaint about the recommendation itself.

Is an ongoing fee worth paying?

That depends entirely on what it buys and what your circumstances are, which this site cannot assess. What can be said generally is that an ongoing percentage is the largest cost in most retirement plans over time, so it deserves a written answer to the question of what is delivered in a year when nothing changes.

Do I need advice to use pension drawdown?

Not as a rule, though some providers require it before certain transfers, and advice is compulsory for transferring most defined benefit pensions above a threshold. Drawdown leaves the investment and longevity risk with you, which is the reason many people take advice even where it is not required.

How is this site paid?

As an introducer. Where you ask to be contacted, the enquiry is passed to an authorised firm and a fee is paid for the introduction. No firm pays for placement in what is written here, nothing on this page is a recommendation, and the site takes no part in any advice or arrangement that follows.

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