FAQ Regarding Retirement, Pensions
1. What Fees Do I Pay For Financial Advice?
Ongoing Advice Fees/ Additional Fees
Our core service is ongoing financial advice. We offer our clients an ongoing service to ensure they are fully prepared for retirement. For this ongoing service we charge a fee.
Table of ongoing Service Charges - Reeves Portfolio Management Service
Standard fees are based on fund value at each fee review
1% of funds up to £500,000
Example: If your investments are valued at £600,000
£500,000 x 1% = £5,000 p.a £100,000 x 0.5% = £500 p.a
Our clients will also have other fees which are not advice fees- these are product charges.
When holding money on a platform clients will be charged an administration fee by the provider.
For example: Product Charges (Transact)
Single or Consolidated Portfolios of £100,000 and above
Cash & Investments
£0 - £600,000
>£600,000 - £1,200,000
>£1,200,000 - £5,000,000
On the Remainder
Our role as an adviser is to inform you of our fees & the product fees, and one of the considerations that we make when we look at working with different platforms or investment/pension providers. In addition to our advice fees & the product fees there will be an additional management charge to the funds that you are invested in.
An Example of Management Fees:
If you are in a commercial property fund, run for example by Standard Life, the fund manager will charge a fee for their service and running the portfolio. The more cautious the portfolio the lower the charge.
In summary, to run an ongoing investment & pension portfolio; the product will incur relatively low transaction fees; the Investment Management Company will charge for their services, and Reeves Independent will charge a minimal ongoing advice fee.
Initial Advice Fees
Free In ital Pension Review
- A detailed fact find for each of your pensions - We will trace and contact all of your existing pension providers to find out the accrued benefits, whether defined benefit or money purchase schemes.
- An analysis of your different options - We will explore all options open to you to deliver the retirement you deserve. We will also consider all of your assets that can be used to create an income such as your pensions, property, ISAs and business interests.
- A summary report of our research - We will give you a printed report that explains exactly what recommendations we are making, why we have made those recommendations (based on your specific circumstances, your goals and objectives) and the cost of implementing those recommendations.
- A face-to-face meeting at your home or place of work - Our qualified adviser will visit you to talk you through your summary report and answer any questions that you might have.
If you decide to proceed with our recommendations, you will incur initial advice fees- as shown in the table below.
Table of Initial Advice Fees
Ongoing Service Applies
No Ongoing Service
Standard fees are based on investment amounts being advised on that time
Funds up to £150,000 @ 2.5%
Over £150,000 @ 0.5%
For advising and setting up regular payments
The above fees apply with no minimum
A minimum adviser charge is £1000
Example: Client is switching 4 pension plans to us with a total value of £250,000
Inital £150,000 at 2.5%= £3,750
2. What Is The Difference Between a Defined Benefit Scheme and Personal Pension?
A personal pension plan can either be a workplace pension arranged by your employer, where both you and your employer contribute to the plan, or a private pension, which you arrange yourself and pay separately from any employer.
The size of your pension pot will also depend on a number of other factors, including:
- How much your employer and/or you contribute
- How long you could save for
- Any charges deducted by your pension provider
From the age of 55, you can take this pot of money and use it to provide you with a retirement income. Retirement income from a personal pension plan is not guaranteed and will depend on how much you take as a cash lump sum (you can take up to 25% of the pot tax-free) and how you decide to provide yourself with an income.
Defined Benefit Scheme
Defined Benefit Pension Plans are sometimes known as final salary pension schemes. A Defined Benefit offers you a guaranteed income for life after retirement, usually indexed to keep up with inflation.
How are defined benefit pension schemes calculated?
- How many years you have been with that employer
- Your pensionable earnings (for final salary schemes, this is your salary at retirement; for career average schemes, this is your average salary across your career)
- Your accrual rate (what proportion of your earnings you'll get for each year spent in the scheme, usually represented as a fraction, e.g 1/8th)
Defined Benefit Scheme Calculations
Number of years in scheme
£50,000 final salary
Scheme Accrual Rate
10 years x £50,000 x 1/80th= Annual income of £18,750
Reeves Independent is not authorised to advise on Defined Benefit Schemes and instruct a third party transfer specialist when necessary.
Do you have a question? Email us at email@example.com.
It is important that no actions should be taken without first taking advice. Personal circumstances and an individual’s appetite for risk means that the advice for one person may not be the same for everyone. Reeves do not advise on Defined Benefit pension schemes. Reeves do introduce a third party specialists in areas of work we do not cover. Reeves run an advanced investment portfolio management service on an advisory basis only