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Pension transfer advice

Stephen1959
Posts: 3 Newbie
I have been trying to transfer my Local Government Pension into a SIPP. This process has been going on for nearly a year and despite having a previous meeting with an IFA, my advisors now say that the FSA rules have changed and I need to get clearance again by an IFA, and that this will cost 5% of my pension pot.
I am concerned as to the reputability of my advisors, who only achieved my custom by an initial cold-call.
I would like a second opinion, as to whether the FSA have just changed their rules (my research suggests that the FSA no longer exists in that format, and that any changes in rules were perhaps 2 years ago) and also whether a 5% fee is reasonable. For a £200,000 pension pot that is a lot of commission!
Any advice appreciated.
Many Thanks,
I am concerned as to the reputability of my advisors, who only achieved my custom by an initial cold-call.
I would like a second opinion, as to whether the FSA have just changed their rules (my research suggests that the FSA no longer exists in that format, and that any changes in rules were perhaps 2 years ago) and also whether a 5% fee is reasonable. For a £200,000 pension pot that is a lot of commission!
Any advice appreciated.
Many Thanks,
0
Comments
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Transferring a final salary pension is in almost every case a seriously bad idea as you are unlikely to be able to get the return from SIPP investments to match the pension you are giving up.
As its a bad idea, a SIPP provider is most unlikely to accept a transfer from a final salary pension as you could claim a mis-sale in years to come. That is why they will probably insist that you get IFA approval, because that transfers the risk to the IFA. No reputable IFA will give approval unless the case is pretty convincing. But no reputable IFA should be cold calling you offering such services.
The relevant part of the FSA is now the FCA, Financial Conduct Authority. You may find this reference of interest.
If you were to give us the name etc of the IFA we may be able to check on them.0 -
Thanks, Linton.
Firstly, it was an Investment Company rather than an IFA who initially approached me. They were going to have to refer me to an IFA, to clear any transfer to a SIPP.
As for the final salary pension, this is effectively frozen until I'm 65, will be an annuity pension and with no benefits to my spouse. The Sipp, with access to funds at 55 and other benefits appears advantageous.
Any comments on the 5% fee payab le to the IFA?0 -
So when you says "my Local Government Pension " do you mean the final salary scheme - that will not be "frozen" but will be increasing in line with the CPI or are you talking about AVCs paid alongside this.
The main pension really, really should not be touched on the recommendation of a cold calling organization. Any AVCs would be different but I would have thought you couldn't touch that until you are in receipt of the LGS pension although I could be wrong (it will be in the scheme rules.0 -
Stephen1959 wrote: »Thanks, Linton.
Firstly, it was an Investment Company rather than an IFA who initially approached me. They were going to have to refer me to an IFA, to clear any transfer to a SIPP.
As for the final salary pension, this is effectively frozen until I'm 65, will be an annuity pension and with no benefits to my spouse. The Sipp, with access to funds at 55 and other benefits appears advantageous.
Any comments on the 5% fee payab le to the IFA?
I would be very much more concerned about the 100% to the investment company. Cold callers tend to offer highly dubious investments with worthless guarantees. People have lost large amounts of money this way. If you give us the company's name and what they are proposing you invest in we can perhaps provide further information.
If its an LGPS final salary pension it isnt an annuity pension. I would be very surprised if there are no surviving spouse benefits, but if it was an annuity pension there would be if you asked for them. In either case you may be able to take the pension early, with reduced benefits.
Be very very careful!!!
If you pay your 5% and the IFA says "no, its not appropriate" then that could be the best £10K you have ever spent. The danger is that he says "yes" and then disappears.
You would be safer talking to a local IFA of your own choosing.0 -
As for the final salary pension, this is effectively frozen until I'm 65, will be an annuity pension and with no benefits to my spouse.
Are you absolutely sure that you know what you are talking about?
This is a deferred LGPS Final salary pension?
http://www.lgps.org.uk/lge/core/page.do?pageId=100344
There are very, very few cases where transferring out of such a pension would be a good idea.0 -
to be blunt, it seems very likely you are about to be the victim of a scam. Stay on here and keep asking questions until you fully appreciate the benefits you have in the LGPS pension scheme - then you can compare with what's being promised. What is the driver behind this - are you fed up with your job and would like to retire early? Or maybe not in the best of health? Or some other reason?The questions that get the best answers are the questions that give most detail....0
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Thanks for the advice. I have an appointment with an IFA next week, so hopefully I will get better advice!0
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I am concerned as to the reputability of my advisors, who only achieved my custom by an initial cold-call.
SCAM. Cold calling is not allowed for investments.
You are looking to transfer a pension which statistically 99% of the time bad advice to do and doing so only on the basis of a cold call which is not allowed.I would like a second opinion, as to whether the FSA have just changed their rules
The Food Standards Agency has no relevance to financial services. The Financial Conduct Authority does (FCA). However, there have been no rule changes and the same position applies that has done for some years. A defined benefit pension transfer is deemed mis-sold unless proven otherwise. So, most schemes will insist on an adviser signing off on it first.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.0 -
Stephen1959 wrote: »Thanks for the advice. I have an appointment with an IFA next week, so hopefully I will get better advice!
Is this the IFA that the Investment Company referred you to?
If you want advice, start with https://www.unbiased.co.uk
IFAs cold calling isn't allowed, which will be why you have this introducer company. Very very high chance of a scam.0 -
Stephen1959 wrote: »Thanks for the advice. I have an appointment with an IFA next week, so hopefully I will get better advice!
'Better' - is this a joke? You claimed your LGPS pension 'is effectively frozen until I'm 65, [and] will be an annuity pension and with no benefits to my spouse'. None of that is true.0
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