DB contingent charging
DB contingent charging in the news this week– stole the headline in Financial Adviser this week.
Trustees of DB schemes are keen to recommend IFAs to their members, but less so when the firm does either not have the capacity to help (size) or they operate “contingent charging” – ie where advice is for free unless a transaction is executed.
It has always seemed quite reasonable to ask customers if they could cover basic expenses if, after all the work, it was decided not to proceed – and hey presto! You have crossed the floor from contingent charging to fee. But IFAC recognise that is also a challenge in the pockets of poverty in the UK – where the DB pension scheme represents virtually the entire estate of the owner.