Advisers charge an average of close to £3,000 for advice on pension consolidation, research has found.
A survey of just over 100 advisers conducted by consumer champion Which? in May this year found that, on average, financial advisers are charging £2,879 to roll multiple pensions worth up to £150,000 into a single self-invested personal pension.
The highest charge for this service was £6,000.
The average £2,879 cost is around 1.9 per cent of the pot’s value, meaning consolidating has the highest average quotation from advisers.
As part of the survey, Which? sought to find out more about advisers’ charges by asking for information related to five scenarios. The findings were:
Just over three-quarters (79 per cent) of advisers charge an upfront fee calculated as a percentage of the amount to be invested in one scenario, with the average fee sitting at 2.7 per cent.
The average £1,837 cost of turning a pension pot worth £100,000 into retirement income also reflects 1.84 per cent of the fund.
Which? says it found requests for advice about taking a 25 per cent tax-free lump sum and setting up a flexible income drawdown are rising noticeably following changes to pensions charges since 2015.
The variance recorded for this undertaking was the largest, and for a pension worth £150,000 reflects around 1.6 per cent of the total pension. The highest quote from an adviser respondent for this service was £4,500.
The survey also finds 46 per cent of advisers have no fee and charges information on their website for prospective customers to check. A total of 20 per cent of advisers have full details of their charges available, while 34 per cent have an outline of rough costs.
Nearly one-third (31 per cent) of financial adviser respondents also say they would advise on pots of £50,000 while 20 per cent required more than £100,000.
An NS&I survey earlier this year, however, says up to 70 per cent of advisers will take pots under £50,000.