Stay in Railway Pension or transfer to SIPP

Babbar

lol, you clearly didnt read the newbie alert!

Babbar

How about if the company use a Financial Advisors firm providing the advice and are regulated and covered by the FCA?

Linton

Babbar wrote: »

How about if the company use a Financial Advisors firm providing the advice and are regulated and covered by the FCA?

Surely it should be the customer who uses the FA, not the company. The FA should have no connection with the company.

It seems that the scammers and purveyors of highly questionable investments we hear about on this forum often use an FA for window dressing and to set up the SIPP. But I would suspect that the FA avoids giving advice on whether the transfer is actually in the customers interest.

Was there one particular company were you thinking about? Perhaps as a satisfied customer or as a employer/representative?

Babbar

I've recently transfered my frozen pension from a previous employer into a SASS. An IFA company then wrote to me to tell me about the investment that the FRPS consultant had given me. Up until now it all seems legit and looks to be a sound investment (although with risk) but now that i've read these comments im not sure what to think.

RichandJ

Babbar wrote: »

lol, you clearly didnt read the newbie alert!

There are a lot of posters on this board who either work within the pensions world or are highly knowledgable about it. They (& I include myself) don't do "hugs & kisses" posts, as they try to correct wrong impressions, outright falsehoods, biased or self interested posts & posts from actual scammers.

There are also a lot of attempts by various scammers to register & post as if they are happy customers of such scammers. Experience has shown that new posters who do such will eventually turn out to be working for the scammers. Hence the hostility to your original post.

If you're not one, then apologies, but your first post will invite this reaction.

dunstonh

Babbar wrote: »

How about if the company use a Financial Advisors firm providing the advice and are regulated and covered by the FCA?

That can happen. Indeed, I am currently helping a a new client with a complaint where that happened. However, it is very unclear who gave the investment advice and that is typically the problem. Often it is documented that the adviser recommends the SIPP but it is the unregulated company that goes on and recommend the unregulated investments.

Our compliance company has told us not to enter into such arrangements as its probable that the IFA will take the liability and most cases would see the IFA liable for redress on complaint. Although there was a case in the financial press recently where the IFA won the complaint.

Whatever the scenario, using unregulated investments for the vast majority of the population is wrong. The whole unregulated investment area is rife with scams and fraud and does not offer the checks or consumer protection that regulated areas get.

Transferring a final salary scheme (that has no investment risk) into one that has investment risk is just wrong 99% of the time. It doesnt matter whether it is regulated investments or unregulated. Using unregulated investments just makes a bad decision even worse.

mgdavid

it also raises suspicion when a newbie comes on and for a first post revives a year-old thread....

Babbar

I have revived a year old thread, because this was the most unbiased and recent opinions available online. I couldnt find anything more recent (sorry if thats not allowed!). Some folk act like right internet warriors.

Babbar

Dunstonh - I worked 8 years for the pension i've transferred over and my thought process was that rather than it just staying where it is I may as well transfer it into a SASS so it can start to generate income, as I have over 20 years left till i retire.

bmm78

Babbar wrote: »

We should have all heard about the annuity scams recently, this im sure will be the next PPI! Your annuity rate gets a 20% charge, your lump sum payment is taxed, majority of pensions you can not leave to your partner or children.

The media have a lot to answer for with this type of statement. By loosely referring to rip-offs and robberies, they blur the line between actual fraud and scams (eg Pension Liberation), and products that should be approached with care and only bought in the right circumstances (eg Annuities).

There are major misconceptions about what an annuity is, and what they are meant to achieve. It is a contract of insurance, designed to protect you against the risk of living too long and exhausting your fund. Anyone buying it as an investment to get a return on their fund is missing the point.

Contrary to how it has been reported in the media, the FCA report indicated (but did not prove) that there are a limited number of providers operating in a different way to other companies, which in turn may be resulting in poor outcomes for consumers. Lost in the mix were the serious concerns raised about the financial awareness of consumers, and the willingness to spend sufficient time and effort on one of the most important financial decisions of their life.

It's really important to look beyond the headlines and take an educated and balanced view on the pros and cons of various pension options.