Frequently Asked Questions
Question
Tell me more about Perfect Pensions.
Answer
It was established in 2001 and has about 130 clients in the local
area and throughout the UK. My name is Ian Burns and I’m the sole
proprietor of Perfect Pensions. I’m G60 qualified and this means I
can advise on the more complex areas such as pension transfers and
options at retirement.
Question
How do you charge for your services?
Answer
You have a choice of fees, commission or a combination of the two.
The rate for general financial planning is £80ph and £120ph for
pension transfers and options at retirement. My understanding is
that this is lower than the industry average and reflects my cost
control as a sole proprietor.
Question
What happens to the commission if I pay a fee?
Answer
Generally speaking this will be re-invested for your benefit.
Question
What about review meetings after I become a client?
Answer
In my client agreement I encourage these and state that they can be
requested either by the client or Perfect Pensions. As part of the
(above) initial discussion about fees and commission, we can discuss
how future servicing might be paid for. Its worth pointing out that
clients’ needs (in terms of servicing) will vary. An annuity client
may need very little, whereas an income drawdown client may require
quite a lot.
Question
How do I choose from the various types of annuity that are
available?
Answer
I will be happy to discuss your options and recommend something
suitable. Most people still buy level lifetime annuities, although
there is an increasing awareness of inflation, particularly
‘pensioner’ inflation, which can be higher than average.
Question
I have a spouse and need some protection for him/her. How do I
choose this?
Answer
Again, we can discuss it and I’ll be happy to show you options. You
can choose between different levels of dependant benefit, such as
50% or 100%. And you can also choose different guarantee periods.
Most clients are aware of 5 year guarantees, but many quite
surprised (and pleased) about 10 year guarantees. This means that if
the annuitant dies during the first 10 years, the annuity will
continue to be paid at the same rate to the dependant or his or her
estate for the remainder of the 10 years. After that it depends on
what dependant’s pension (if any) has been chosen.
Question
I notice that the annuity providers typically guarantee their rates
for only 14 days. What does this mean?
Answer
It means we have only 14 days from the initial quote until the money
and paperwork requirements are with the annuity provider. In
practice this is incredibly tight and everything needs to be chased.
It helps to have an IFA that has been through this a great deal!
There are things that can be done, such as ensuring the funds to be
transferred are already in cash and that the paperwork is correct
first time. And the ceding scheme can sometimes be persuaded to send
the funds by CHAPS (same day telegraphic transfer), although many
are reluctant due to cost.
Question
I have a medical condition that may qualify me for an enhanced
annuity. How does this work?
Answer
There are a number of enhanced annuity providers and when I get a
case that might qualify, I often give one or more a ring to run it
past them. In other cases (where I’m certain the client will
qualify) we can proceed immediately to the medical questionnaire.
The initial quote from the ‘Exchange’ will only be a guide and the
personal quote will only be possible after their underwriters have
looked at your completed medical questionnaire.
Question
Will I need to have a medical?
Answer
No, the underwriters will base their decision on your questionnaire,
although they reserve the right to contact your doctor after the
annuity has been finalised. Typically you receive a personal quote
within a few hours of them receiving your questionnaire.
Question
I’m interested in income drawdown rather than an annuity. Can you
help?
Answer
Yes I will be pleased to help, although I’ll always show the
complete range of options, including an annuity, as part of the
advice process. The technical term for income drawdown is now
‘unsecured income’ or an ‘unsecured pension’, although I prefer the
old term, which is still commonly used.
Question
I can’t decide between an annuity and an unsecured pension
(drawdown). How will you advise me?
Answer
I’ll look at your circumstances and needs and talk it through with
you. In days gone by this might have concentrated on the pension
options, but many clients now have a number of sources of income and
good investment portfolios. In other words, the income in retirement
can come from a range of sources and the planning process should
include all of them. And its quite common to gradually switch on the
income, rather than do it all at once. Other considerations include
future inheritances and possible trading down to a smaller property
(to release capital).
Question
Can you advise on my investment portfolio?
Answer
Yes, this should be taken into account and I’ll be happy to advise.