MetLife being recommended by IFA

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  • bostonerimus
    bostonerimus Posts: 5,617
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    dunstonh wrote: »


    Did you not read the comment about death benefits?

    Yes, but mis-read and then went back and altered my comment
    That option would already have been costed and compared as part of the pension transfer process.

    It would be good to see those costs...the OP did not mention that option had been evaluated and rejected. The OP has 200k to transfer so what are the incomes tom the DB and the MetLife plan, when will they start, are they index linked etc?
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • dunstonh
    dunstonh Posts: 115,904
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    It still doesnt make it bad advice.

    The IFA failed in getting the client to understand investment risk in context with other risks. However, that happens. Some people just cannot grasp it or do not want to grasp it. In those cases, the IFA has to recommend what is suitable and if that means using a product/investment like this, then so be it. That is why this niche options exist.

    I have put plenty of people into investments and products over the years that I would never use personally. Advisers have to do that. You cannot allow you own risk profile and views to cloud advice decisions on what is right for the individual based on their risk profile, capacity for loss, knowledge and behaviour. The OP has explained her position and the product fits. I may not like the product but I can see why it was used.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • RADDERS
    RADDERS Posts: 241
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    dunstonh wrote: »
    It still doesnt make it bad advice.

    The IFA failed in getting the client to understand investment risk in context with other risks. However, that happens. Some people just cannot grasp it or do not want to grasp it. In those cases, the IFA has to recommend what is suitable and if that means using a product/investment like this, then so be it. That is why this niche options exist.

    I have put plenty of people into investments and products over the years that I would never use personally. Advisers have to do that. You cannot allow you own risk profile and views to cloud advice decisions on what is right for the individual based on their risk profile, capacity for loss, knowledge and behaviour. The OP has explained her position and the product fits. I may not like the product but I can see why it was used.

    Thank you for your honest reply dunstonh I know it is my own ignorance that is holding me back,

    The IFA has said that we can change the product going forward but as I do not need to touch the funds for a number of years a guaranteed 3% less costs is more than I am getting on my cash accounts.
  • bostonerimus
    bostonerimus Posts: 5,617
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    edited 9 June 2017 at 5:13PM
    RADDERS wrote: »
    Thank you for your honest reply dunstonh I know it is my own ignorance that is holding me back,

    The IFA has said that we can change the product going forward but as I do not need to touch the funds for a number of years a guaranteed 3% less costs is more than I am getting on my cash accounts.

    Yes, but how does that compare to your DB pension? What is the income projection for the DB pension vs the MetLife product......to me in the US the MetLife product sounds like a variable annuity with a rider. These are often complex and expensive.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • bostonerimus
    bostonerimus Posts: 5,617
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    dunstonh wrote: »
    It still doesnt make it bad advice.

    The IFA failed in getting the client to understand investment risk in context with other risks. However, that happens. Some people just cannot grasp it or do not want to grasp it. In those cases, the IFA has to recommend what is suitable and if that means using a product/investment like this, then so be it. That is why this niche options exist.

    I have put plenty of people into investments and products over the years that I would never use personally. Advisers have to do that. You cannot allow you own risk profile and views to cloud advice decisions on what is right for the individual based on their risk profile, capacity for loss, knowledge and behaviour. The OP has explained her position and the product fits. I may not like the product but I can see why it was used.

    If the OP is risk intolerant why are they transferring out of the DB pension? Do they have to? If death benefits are a worry was the option for some life insurance explained?
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • RADDERS
    RADDERS Posts: 241
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    Yes, but how does that compare to your DB pension? What is the income projection for the DB pension vs the MetLife product......to me in the US the MetLife product sounds like a variable annuity with a rider. These are often complex and expensive.

    The point of me doing the transfer is that the pension is not needed as hubby has a very good pension, so as the death benefits are pretty poor was hoping to be able to pass the pot on to either hubby or kids on my demise.
  • bostonerimus
    bostonerimus Posts: 5,617
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    RADDERS wrote: »
    The point of me doing the transfer is that the pension is not needed as hubby has a very good pension, so as the death benefits are pretty poor was hoping to be able to pass the pot on to either hubby or kids on my demise.

    If you don't need the income from the DB pension to live and want to pass the cash value plus some gains onto heirs did the IFA talk about the option of taking a bit more risk so that you have the chance to leave a larger amount?
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • dunstonh
    dunstonh Posts: 115,904
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    .to me in the US the MetLife product sounds like a variable annuity with a rider. These are often complex and expensive.

    It isnt that in the UK. A few US providers have tried over the years to enter the UK market with that type of product but fell flat on their face and most returned to the US closing their UK arms.
    If the OP is risk intolerant why are they transferring out of the DB pension? Do they have to? If death benefits are a worry was the option for some life insurance explained?

    Life assurance would be priced and compared by the IFA in their research when the recommendation is based on death benefits. Its one of the standard things done on pension transfers.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • RADDERS
    RADDERS Posts: 241
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    If you don't need the income from the DB pension to live and want to pass the cash value plus some gains onto heirs did the IFA talk about the option of taking a bit more risk so that you have the chance to leave a larger amount?

    When I went for the initial meeting she went through different scenarios, showed me graphs etc but I really am risk adverse I understand that I could do better but I know I could not cope with getting a statement showing a 20% or 30% loss of funds.
    As I have said before all our savings are held in cash ( Santander, regular savers etc) and they are more than the DB pot but am thinking of opening an S&S ISA this tax year.😱
  • Neasy
    Neasy Posts: 92
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    Hi there. I would say that I'm pretty risk averse myself but surely if you're just holding cash you're taking a risk (which is pretty much a certainty) that the capital value will be eroded by inflation, whereas holding a diversified portfolio is less risky than holding cash; that way you'r mitigating all your risks including the inflation risk.
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