Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • tiswiz
    • By tiswiz 5th Dec 17, 9:14 PM
    • 3Posts
    • 0Thanks
    tiswiz
    impossible to find FA for DB transfer
    • #1
    • 5th Dec 17, 9:14 PM
    impossible to find FA for DB transfer 5th Dec 17 at 9:14 PM
    It is impossible to find a FA to transfer my £36k LGPS DB pension to a DC so I can take it out as a lump sum. 1st they are paranoid about getting sued in the future, 2nd they feel the risk to high for anything under £100k & 3rd if they find you to be an insistent client they up their fee so in effect they are scamming you which was what these pension rules were designed to minimise in the first place, does the government realise the pension freedom revolution seems to only apply to those with contributory pensions not those with benefit or final salary schemes?
Page 2
    • sandsy
    • By sandsy 7th Dec 17, 7:50 AM
    • 1,224 Posts
    • 721 Thanks
    sandsy
    The FCA make you use an IFA and they charge an amount which they are entitled to do but there is not a lot of choice in my experience, because many IFAs are not in a position to offer advice on this type of transaction.
    Originally posted by iro
    It's not the FCA that make you use an IFA, it's the law.

    If there's not a lot of choice, it's because advisers choose not to offer this sort of advice. And that's because it's fraught with difficulty and the risk of complaints, years after the event when people get a lower income than they anticipated because they transferred without fully understanding the risks.
    • iro
    • By iro 7th Dec 17, 8:13 AM
    • 38 Posts
    • 17 Thanks
    iro
    No idea what 'Sir Nige' has to do with this?

    Of course you have no idea what transfer value I received or how generous it was relative to the actual pension.

    Everyone is entitled to their view on this but it does appear that some believe that it is never right to transfer at any price. Even if you were offered a 100x or a 1000x? I was pleased to have done it and I have no complaints about the IFA, who in their fee were probably reflecting the risks (indemnity insurance), the need for qualifications and the time spent preparing the report.

    If Gilt yields rise and additional liquidity is injected by existing annuity holders being able to reverse them (the original plan to HMG lost its nerve) I have no problem with purchasing one probably at better terms than the value I have given up.

    The key factor?

    THE PRICE! (not some categorical imperative 'never').
    Last edited by iro; 07-12-2017 at 8:15 AM.
    • AlanP
    • By AlanP 7th Dec 17, 12:59 PM
    • 989 Posts
    • 703 Thanks
    AlanP
    No idea what 'Sir Nige' has to do with this?

    Of course you have no idea what transfer value I received or how generous it was relative to the actual pension.

    Everyone is entitled to their view on this but it does appear that some believe that it is never right to transfer at any price. Even if you were offered a 100x or a 1000x? I was pleased to have done it and I have no complaints about the IFA, who in their fee were probably reflecting the risks (indemnity insurance), the need for qualifications and the time spent preparing the report.

    If Gilt yields rise and additional liquidity is injected by existing annuity holders being able to reverse them (the original plan to HMG lost its nerve) I have no problem with purchasing one probably at better terms than the value I have given up.

    The key factor?

    THE PRICE! (not some categorical imperative 'never').
    Originally posted by iro
    Farage was referenced, I assume, as he will be getting a very nice "public sector" pension when he becomes an ex-MEP. If he took the CETV (assuming it is possible with his Scheme) the taxpayer would likely save a lot of money (dependent on how long he lives).

    Same applies to your transfer from the LGPS, for which the CETV calculation is calculated by a totally different set of rules & guidelines than a private sector scheme. The end result of LGPS calculations is a very low CETV compared to the annual pension foregone, so as Hyubh says, your neighbours would be very pleased.
    • hyubh
    • By hyubh 7th Dec 17, 1:50 PM
    • 1,980 Posts
    • 1,491 Thanks
    hyubh
    Of course you have no idea what transfer value I received
    Originally posted by iro
    http://www.lgpsregs.org/schemeregs/actguidance.php

    Scroll down and open up 'Transfers - individual incoming and outgoing'. See in particular the link for factors:

    http://lgpslibrary.org/assets/actgui/ew/TransfersF20170309.pdf

    These factors ultimately depend not on gilts, but a CPI-based discount rate ('SCAPE') that the government uses to notionally cost the unfunded public sector schemes:

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508105/Basis_for_setting_the_discount_rate_for_calculatin g_cash_equivalent_transfer_values_payable_from_the _public_service_pension_schemes.pdf

    Use of SCAPE to value public sector pensions is not uncontentious, as it makes the cost come out much lower than if they were valued in the same way a private sector scheme's liabilities are in its sponsoring employer's accounts. Admittedly use of SCAPE for LGPS CETVs specifically isn't particularly contentious, though part of that is probably the fact it is keeping LGPS CETVs down compared to CETVs in the private sector.

    Everyone is entitled to their view on this but it does appear that some believe that it is never right to transfer at any price.
    You're in the LGPS, so it won't be at 'any' price in the slightest. Use of SCAPE is a bit of an anomaly (it isn't used for anything else in the LGPS, and isn't used by private sector schemes), but that's just how things stand.

    If Gilt yields rise and additional liquidity is injected by existing annuity holders being able to reverse them (the original plan to HMG lost its nerve) I have no problem with purchasing one probably at better terms than the value I have given up.
    I hope you don't really think that (i.e. you are transferring out because you really, really want the extra flexibility, not on a belief of being able to get something like the benefits forgone if you changed your mind). Your chances of being able to purchase an annuity anywhere near the LGPS benefits forgone is highly, highly unlikely.

    The key factor?

    THE PRICE!
    Insofar as price is indeed the 'key' factor, LGPS CETVs aren't worth it.
    • thetimewill
    • By thetimewill 7th Dec 17, 2:55 PM
    • 46 Posts
    • 7 Thanks
    thetimewill
    Hello hyubh,
    My spouse has taken CETV from LGPS. By doing so she is able to retire now ,rather than in 6 yrs time, when she would receive her state pension. The LGPS pension at that time, would need to be paid for over 25years to cover the CETV.
    It enables us to enjoy retirement together for longer. Certainly worth it for us.
    Regards
    Billy
    • iro
    • By iro 7th Dec 17, 2:57 PM
    • 38 Posts
    • 17 Thanks
    iro
    LGPS????

    My scheme was with a bank which is in the 'private sector' so not RBS.
    • soulsaver
    • By soulsaver 7th Dec 17, 3:43 PM
    • 1,489 Posts
    • 536 Thanks
    soulsaver
    3% of the cetv but that is the best price I could find, has anyone done it cheaper?.
    Originally posted by iro
    FWIW I paid 0.7% this time last year...
    • hyubh
    • By hyubh 7th Dec 17, 3:48 PM
    • 1,980 Posts
    • 1,491 Thanks
    hyubh
    LGPS????

    My scheme was with a bank which is in the 'private sector' so not RBS.
    Originally posted by iro
    Urgh, confused you with the original poster. Although, by the same token, why did you post to this thread in the first place if you weren't...
    • iro
    • By iro 7th Dec 17, 3:52 PM
    • 38 Posts
    • 17 Thanks
    iro
    title of thread;

    'impossible to find FA for DB transfer'

    I have/had a DB scheme

    Anything else I can help you with?
    • pip895
    • By pip895 7th Dec 17, 3:53 PM
    • 445 Posts
    • 254 Thanks
    pip895
    I couldn't find anything below 1% when I looked a few months back on a ~500k cetv.
    • iro
    • By iro 7th Dec 17, 3:55 PM
    • 38 Posts
    • 17 Thanks
    iro
    That is a good rate sadly I did not find that one. One IFA quoted me 7% and a number wanted a fee up front

    My feeling was that a sizeable reward encouraged the IFA to complete the process within the 3 month period.
    • hyubh
    • By hyubh 9th Dec 17, 12:20 AM
    • 1,980 Posts
    • 1,491 Thanks
    hyubh
    title of thread;

    'impossible to find FA for DB transfer'

    I have/had a DB scheme

    Anything else I can help you with?
    Originally posted by iro
    Um, the first line of the original post:

    It is impossible to find a FA to transfer my £36k LGPS DB pension to a DC
    The fact it is a LGPS pension in question is not trivial in the slightest.
    • iro
    • By iro 9th Dec 17, 8:35 AM
    • 38 Posts
    • 17 Thanks
    iro
    the question was about finding an IFA

    I had a DB (I still have two more) and I transferred out of one of them.

    I found an IFA they charged me 3% (the question was not the advisability of transferring that is the role of the IFA).

    The advice from an IFA would identify the scheme and provide appropriate advice (that is why you pay the money).

    Simples.

    Anything else I can help you with?
    • anselld
    • By anselld 9th Dec 17, 9:13 AM
    • 5,424 Posts
    • 4,988 Thanks
    anselld
    I found an IFA they charged me 3% (the question was not the advisability of transferring that is the role of the IFA).
    Originally posted by iro
    The question was also "without the rip-off fee". You have not given enough information to know if that fee was a rip-off.

    Anything else I can help you with?
    Originally posted by iro
    Realise that's an annoying question and completely unnecessary?
    • iro
    • By iro 9th Dec 17, 9:59 AM
    • 38 Posts
    • 17 Thanks
    iro
    'Anything else I can help you with?'

    merely means would you like any more information.

    Clearly I did not believe that 3% was a rip off because I went ahead and did it. I also offered in the posts above some perspective on the other rates I came across, also others joined into give examples of the rates they were charged so in lots of ways the contribution that I made carried the discussion forward on the issue of the availability of IFAs and the rates they charged ('rip off' or otherwise).

    In addition someone contributed who said they wished to retire earlier than the scheme would normally allow, so did take a transfer value this was due to their own circumstances and their own judgement.

    One IFA told me that he would happy to do the transfer if I could produce a letter stating that I would be 'dead in a year'. This type of personal information affects the decision and precisley why you should take advice.

    I would advise everyone to take advice at the 'best' possible price/quality, 'discovering' a good price or a benchmark of a 'rip off' is presumably the purpose of MSE forums actually offering advice not so much.

    I am absoulutely unabashed, unashamed and unapologetic about promoting greater transparency on the issue of the pricing of stautory IFA advice only by having greater transparency will consumers be able to make reasoned decisions.

    Anything else I can help you with?
    • brewerdave
    • By brewerdave 9th Dec 17, 10:06 AM
    • 4,593 Posts
    • 1,908 Thanks
    brewerdave
    @iro - was that fee of 3% independent of the pot size ?? My own (admittedly brief) research suggested that the % fee would come down considerably as the pot size increased. I took my DB pension but would certainly have baulked at paying 3% !!
    • iro
    • By iro 9th Dec 17, 10:32 AM
    • 38 Posts
    • 17 Thanks
    iro
    the approximate amount was just over 100k I do not think that 3% was a good price but it was the best price that I could reasonably find within the constraints (3 months) of the CETV letter.

    There were other IFAs looking for up front fees but this fee came from the pot and I could be certain that it would go through. The IFA dealt with the matter efficiently and recieved the agreed fee so I am happy.

    The list of IFAs specialising in pension transfers that I obtained appeared to include a number who did not do DB transfers but 'could facilitate' through an unamed third party. There appears to be a second wholesale market where IFAs send requests to other specialists who then sign off on the transfer at a wholesale price before charging the client a retail price.

    The information could be much improved if IFAs made it clear whether they were qualified or not qualified to advise on a DB transfer. The IFA I choose was and it was clear within the professionalism of their report and their procedures that they completed in a timely way that they were.

    Was it the 'best' price?

    Probably not.

    Was it the best obtainable price to complete the matter with certainty given my own circumstances?

    Probably.
    • anselld
    • By anselld 9th Dec 17, 9:45 PM
    • 5,424 Posts
    • 4,988 Thanks
    anselld
    'Anything else I can help you with?'
    Originally posted by iro
    Yes... how does the ignore list work?

    ... no itís ok, Iíve found it.
    • iro
    • By iro 9th Dec 17, 10:12 PM
    • 38 Posts
    • 17 Thanks
    iro
    No idea what the issue is...

    genuinely, is there anything else I can help you with?
    • hyubh
    • By hyubh 9th Dec 17, 10:32 PM
    • 1,980 Posts
    • 1,491 Thanks
    hyubh
    the question was about finding an IFA

    I had a DB (I still have two more) and I transferred out of one of them.
    Originally posted by iro
    That's lovely, but the OP has an LGPS pension. This implies the specifics of an LGPS pension are relevant. What's so hard to understand...?
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

217Posts Today

1,922Users online

Martin's Twitter