DB contingent charging
DB contingent charging in the news this weekâ€“ stole the headline in Financial Adviser this week.Â Â
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 â€œcontingent chargingâ€ â€“ 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 â€“ and hey presto! You have crossed the floor from contingent charging to fee.Â But IFAC recognise that is also a challenge in the pockets of poverty in the UK â€“ where the DB pension scheme represents virtually the entire estate of the owner.Â