SIPP - Do I need an ongoing relationship with IFA?

[hmmmmmmmmmmmmmmmm]

I transferred my DB pension into a SIPP last year.

I am currently paying 0.25% ongoing service charge to the SIPP provider, which is fine. PLUS 0.25% to the IFA who did the transfer. I have asked her to provide confirmation of this, and she says that it is for ongoing advice and compliance costs, and is required because it was a DB transfer not a cash or DC.

I paid a (fairly large) one-off fee when the policy commenced. The IFA hasn't actually provided any ongoing advice or feedback in the last twelve months. There has been no update on how the pension is performing. I merely log on to SIPP company website and see for myself.

I have just invested a lump sum, and she charged me a flat fee for this.

So, my question is whether an ongoing IFA fee is compulsory/necessary? If so, what level of service should I be getting for 0.25%?

0.25% is very low, on average you would expect between 0.5% and 1% depending on the pot size.

However, an ongoing advice fee is just that, an annual review is the least for that money.

@fromdownwest Thank you for the info. Do you know if it is compulsory to retain an IFA for the reasons she has given?

My SIPP is invested with a very well known pension provider, and my funds are held in one of their schemes. My IFA doesn't manage anything personally.

I'm just wondering whether I could pay her for an annual review instead? I doubt that would be more than a few hundred pounds, and I am currently paying substantially more than this.

No, it’s not mandatory, and any statement to the contrary is in breach of FCA guidelines. I would however think that an IFA can provide value. Some are good some are bad at client servicing. When turned off, the IFA would have no obligation to assist you I.e drawing up illustrations, and assist in planning your retirement through cash flow modelling etc. However, if it was a transactional only piece of business, it’s quite cheeky to take the o.25%