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  • FIRST POST
    • happyandcontented
    • By happyandcontented 23rd Sep 17, 10:48 AM
    • 852Posts
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    happyandcontented
    Still got Pensions Dilemma....
    • #1
    • 23rd Sep 17, 10:48 AM
    Still got Pensions Dilemma.... 23rd Sep 17 at 10:48 AM
    I have posted before about IFA/Pension advice and I took the advice of forum members and shopped around after it appeared that the first IFA we saw would levy charges that were deemed excessive. We really liked the chap though and trusted him to look after our interests, with a reservation that I will explain later.

    Yesterday, we saw another chap who was recommended by a local non pension specialist IFA. He seemed to know what he was doing and it all accorded with what I had learned about the subject on here and from reading info elsewhere.He appeared to have creative ideas and was enthusiastic. However, he is a small one man band business, the premises were odd ( quiet and not busy) and he appeared very nervous during our meeting. I have researched him on the IFA registered site (using a link from his own website) and his name does not come up, is this a red flag?

    His charges were lower (which is now becoming less of an issue for us as we feel we need to be sure we choose wisely) However, he came highly recommended by an IFA we know. She was upfront that she would receive a commission if we used him.

    The pension pot involved is £1.2m split between a DB CETV and 3 DC pots.

    The first chap almost dismissed the need to look at the DB CETV saying it should be left there.That is our reservation with him.

    The second said as the transfer value was so good v the 26k it would produce at 65 it should be looked at and actively considered.

    So, two specialist pension IFA's, two very different approaches and fee levels. Leaving us confused and uncertain where to go from here.

    We have just set up a Ltd company and our accountants also have a financial arm who do this kind of thing too so we have agreed to meet with them for a 3rd opinion. My reservation with that is that all our eggs would be in one basket....

    Any advice on what are the key questions we should be asking to aid our decision?
Page 3
    • happyandcontented
    • By happyandcontented 24th Sep 17, 8:56 PM
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    happyandcontented
    Your IFA needs an additional qualification to transfer safeguarded benefits, so if they're shying away from it they may not have this qualification (especially if a one man band), and as such might not be providing you with the ideal overall picture. Perhaps just ask if he does?
    Originally posted by Monkey2801
    Thanks, both IFA's that we have seen had this qualification, that was something we ascertained before we chose one to see.
    • Audaxer
    • By Audaxer 24th Sep 17, 8:59 PM
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    • 283 Thanks
    Audaxer
    Another thing that would put me off the transfer would be the ongoing charges of an IFA to manage the £810,000 transferred from the DB pension. I see that you were quoted 1.4% ongoing from the first adviser which seems really excessive as that would amount to over £11,000 per year just for the DB pot alone. I don't know what the second adviser quoted, but hopefully if you do go down that route you could find an IFA to manage the portfolio for a significantly lower percentage.
    • happyandcontented
    • By happyandcontented 24th Sep 17, 9:15 PM
    • 852 Posts
    • 1,699 Thanks
    happyandcontented
    Thanks, the second adviser quoted lower for the 400k but he was the one man band.

    The first adviser didn't quote for the DB pension as he didn't consider the transfer advisable.
    • mgdavid
    • By mgdavid 25th Sep 17, 2:20 PM
    • 5,278 Posts
    • 4,464 Thanks
    mgdavid
    Only as ultra cautious as we are being!! .......
    Originally posted by happyandcontented
    Query this; if you were being ultra-cautious you would keep the certainty of the DB pension rather than hoping it should grow if cautiously invested (your words). Maybe you are more of a risk-taker than you think.

    Can't envisage either of you living to 95? Have you examined your own and your antecedents health, and looked up the life expectancy for your cohort? - you may be surprised.

    There are a lot of metrics to help you to a decision so I wouldn't rely on gut feel alone - or at all.
    A salary slave no more.....
    • happyandcontented
    • By happyandcontented 8th Oct 17, 9:00 PM
    • 852 Posts
    • 1,699 Thanks
    happyandcontented
    Ok, so to update, we saw another advisor from HL and he seemed to be willing to explore all our options.

    He noticed that if the pension holder died before the pension went into payment only a return of premiums would be payable, no spousal pension. Which is an issue as there are 3 years at the earliest before that would happen. He didn't say this bolstered the view for transfer but did flag it as a concern. He also gave us figures on what the DC pension would produce and how it could be varied to bridge the gap (and then reduced back down afterwards)before SP kicked in.

    So, what we decided to do was allow him to investigate all our DC pensions with a view to holding onto the DB pension if that investigation decides that they could be left where they are or better invested to produce the required return. We may also take life assurance to cover the problem of death before the DB pension would be in payment. All of the above is cost free.


    None of the other advisers seemed as thorough to us. He told us at the outset that the LTA would kick if we transferred the DB pension and that having missed the boat with LTA protection this could potentially cost us £45,000 in tax.

    To investigate the DB pension and advise on it would be £1500, so we may decide to go down that route if needed.
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