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Ad hoc adviser charge not from product

GolfPutt21GolfPutt21 Member
in Technical stuff

Hi all,

An outsourced adviser is recommending a VCT for one of their clients. They have suggested they take an initial fee for the advice and have proposed to take the initial fee direct from clients existing pension.

Can this be done?

Is this legal to do?

My manager doesn't feel comfortable proceeding on this basis but adviser is adamant.

Thanks all

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Comments

  • SimplyParaplannerSimplyParaplanner Member

    You can only take it from the pension if it is for pension advice only, no issues taking from say a GIA or ISA they might hold but not a pension. You and your manager are right to be wary of this.

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  • SA96SA96 Member

    You are in the right, it would breach HMRC's rules regarding adviser charging for pensions.

    https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm143200#IDANGJMD

    "Also unauthorised member payments would be created if the payment was for costs that were not just for pension advice related to the registered pension scheme. For example, costs for advice about retirement income in relation to ISAs or other non-registered pension scheme property would not be covered. The amount of the unauthorised payment would be the amount of the costs that did not relate to pensions advice related to the registered pension scheme".

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  • GolfPutt21GolfPutt21 Member

    Thanks guys.

    We thought that this was the case. Glad you have confirmed.

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