Why Free Financial Advice is Too Good To Be True?
We understand that there are a lot of people who come across online ads while searching how to transfer pension such as “Free Financial Advice” or “Free Financial Advisor”. At a glance, people will think instantly to go with these pension financial advice ads and follow wherever the ads are pointing them to. However, the truth is that there is nothing such as free financial advice.
Running a pension financial advisers firm requires a lot of resources involved. It took a great deal of cost to run the firm itself, especially if the firm is starting from scratch. There will be unexpected expenses that will be faced by the firm. Once the firm commences, there will be regular ongoing staff training that is required to develop each of the staff to represent the firm.
Staff training is important because the landscape of the pension industry is constantly changing from time to time and it is in the firm’s interest in order to give the best services to the clients. Apart from that, you have to consider the regulations that have to be followed. In the UK, a trusted and well-regarded financial advisor should be registered and comply with the rules set by the FCA (Financial Conduct Authority). The registration process itself took time and was a process that not all of the firms can fulfill.
There is still a possibility that you can have free financial advice from a regulated financial advisor. However, they are most likely to be paid a large commission, meaning that they will deduct your pension a larger sum of money than the industry’s standard, especially if you have a DB pension. It is more likely that they will charge your DB pension scheme transfer value more commission.
In Cameron James, we give you a transparent fee and charges that are involved in every of our client’s pension transfer advice by the following:
Pension with up to £250,000 value will cost you a 3% setup fee.
Pension with value £250,000 - £1,000,000 will cost you 2% setup fee.
Pension with more than £1,000,000 value will cost you a 1% setup fee + a 1% Ongoing Management Fee.
Financial advisors who offer free financial advice pension, in truth, will only eventually end up giving you two options. First, as explained above, the products that are offered by these pension financial advisors will cost you a great sum of commission that will deduct your pension more than the industry’s standard. Second, the product that is offered to you is not an FCA-regulated product. This means that it can be a scam product that leaves you with no protection. Unlike the products that are sold by Cameron James, all of our products are regulated by the FCA which means you will be automatically protected by the government.
Apart from those downsides of choosing free financial advice from pension advisors, the important thing that you have to keep in mind is for the longer term. It is possible that it will do damage to your investment portfolio because the product is rather pricey or unregulated by the FCA. Moreover, it could also be that you are given certain investment products that perform poorly on the market because they do not have clear incentives to manage your investment continuously.
At Cameron James’ independent financial advice, there is a cost to cover the ongoing management that will be explained transparently to all of our clients, especially for final salary pension transfer advice cost because DB pension transfer values involve a large amount of money. The purpose of this fee-based management is solely to give you a better work drive to manage your investment as well as providing you with a good portfolio. All of these processes lead to generating more happy clients that gladly refer our service to their colleagues and family.
Should you have other questions or concerns about pension transfer, feel free to reach us through:
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Video Timestamp:
00:00 - Intro
00:20 - Free Financial Advice : Too Good To Be True
01:09 - Pension Transfer Fee Breakdown at Cameron James
02:26 - What Happen Behind Free Financial Advice
04:23 - Why Taking Free Financial Advice is Bad For You
04:58 - Pension Transfer Process at Cameron James
06:10 - Closing
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Dominic James Murray, CEO and leading Pension Transfer Specialist of Cameron James. Helping expats in 23 countries for over 10 years (including the USA and non-UK residents):
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Thanks for watching the video Why You Should NEVER Take FREE Financial Advice? | Cameron James, Expat Financial Adviser
