Explaining The Different Pension Review Charging Models
Pension review services help you understand your pensions efficiently. However, the public views these services as mostly contingent. They are left surprised when they suddenly see fees charged for the review of their pensions. To make things clear, here are the three common models of pension review charging approved by the Financial Conduct Authority.
True Contingency Model
Pension review services will provide free consultation, calculations, report, and a recommendation based on these facts. The first model is the true contingency variation. You are only charged if you approve of transferring your pension to another fund based on their recommendation. However, these decisions are fact-based, which removes the likelihood of profiteering from service providers using this model.
Consultation as a Service Model
Pension review services can also charge for consultation, which also includes calculations, reports, and recommendations. They can also charge you for the pension transfer directly from the pension’s total fund value. However, you can find the information provided to be in-depth compared to the discussion with providers using a contingency consultation charge model.
Set Transfer Fee Model
The third model is similar to the second model wherein the consultation service including all research and analysis has a set fee. However, its difference is there is a set transfer fee if you use their services. Instead of charging you by percentage as per the second model, the service provider will provide you a set value paid direct from your pension fund.