transfer out of DB scheme

PeacefulWaters

steamroller wrote: »

Thanks for the advice so far, the problem I have is trying to decide whether to transfer or not before the government ban these transfers next April as suggested.

If in doubt do nothing.

Don't let an arbitrary deadline lead you to do something stupid and expensive.

bigadaj

mania112 wrote: »

You're also not explaining what you mean by signing it off (and I can't see anything in the links that helps either).

Only IFA's with a certain level of qualification can transact a transfer (I think that's what you're trying to show in the first link) and yes, as per your second link, you should always seek advice.

What i'm saying is an IFA doesn't need to recommend a transfer to make the transfer.

Unfortunately, or not (for the client or an IFA who wants to make a few quid), that's fact. I'm just trying to clear up the hazy term 'sign off'.

But surely signing off is a fairly straightforward term.

It would be a requirement of the db scheme to get an ifa involvement in order to cover themselves. In pure terms then it's unlikely to be the best financial option but the client might have other priorities and objectives. The question is can and would the ifa transfer it if it isn't in all probability the best pure financial option, or would he be subject to risk and sanction in future. Surely if the ifa did his job by outlining and calculating the different options and then explaining these to the client he should be fulfilling his role, and should be able to defend any claim or complaint in future.

dunstonh

1) An IFA needing to sign it off: I'm not sure what this means? is Atush saying an IFA has to agree it's a good idea? No, an IFA doesn't. An IFA will happily take the clients fee in exchange for arranging the transfer. The recommendation can be NOT to do it, but still carry out the transaction if the client insists it's what they want to do.

A pension transfer qualified adviser (IFA or FA) needs to sign off on the transfer. i.e. the receiving scheme needs to know that the adviser has given advice in this area and formally documented it and typically process the business through their agency. Virtually all receiving retail schemes will not accept a transfer without an FA/IFA haven given advice first and accepting liability for the transfer. That is effectively what is meant by "signed off by an IFA" when mentioned on threads like this.

Some advisers will still transact a pension transfer even when their advice is to not transfer it. This is known as insistent advice. However, not all will transact insistent client business with pension transfers. Processing business you know to be wrong does not protect you from mis-sale. There have been complaints upheld where people have been documented as insistent clients but still had the complaint upheld where the client was not in a position to know what was good for them or not but the adviser could see it clearly wasnt good for them. More borderline cases or cases which involve knowledgeable and experienced investors are more likely to be rejected if complained about. An adviser needs to make that judgement call on the risk they are personally taking by transacting that business. Some will do it as insistent. Others will not.

mania112

dunstonh wrote: »

A pension transfer qualified adviser (IFA or FA) needs to sign off on the transfer. i.e. the receiving scheme needs to know that the adviser has given advice in this area and formally documented it and typically process the business through their agency. Virtually all receiving retail schemes will not accept a transfer without an FA/IFA haven given advice first and accepting liability for the transfer. That is effectively what is meant by "signed off by an IFA" when mentioned on threads like this.

Some advisers will still transact a pension transfer even when their advice is to not transfer it. This is known as insistent advice. However, not all will transact insistent client business with pension transfers. Processing business you know to be wrong does not protect you from mis-sale. There have been complaints upheld where people have been documented as insistent clients but still had the complaint upheld where the client was not in a position to know what was good for them or not but the adviser could see it clearly wasnt good for them. More borderline cases or cases which involve knowledgeable and experienced investors are more likely to be rejected if complained about. An adviser needs to make that judgement call on the risk they are personally taking by transacting that business. Some will do it as insistent. Others will not.

This is right. I have never seen an IFA refuse to do something. Let's be honest.

And it's not really a question of 'doing the right thing'. An IFA has gone through the process of making a recommendation and decided, almost always, that Mr. Client should not transfer. He maybe has earnt £750-1500 at this point.

Now, for the IFA to sign an application form he can earn the same amount again (potentially), he will. The client insists, so better you get the fee than some other IFA.

To say 'you'll struggle to find an IFA who will sign this off' is rubbish, honsetly

EDIT: I should say 'rarely' does an IFA refuse to transfer. The refusal will be where there definitely is a loss by transferring.

EDIT2: The average punter on these forums might be thinking it's not possible because an IFA will not give a recommendation to transfer. It needs to be clear that a recommendation is not required, just an IFA to facilitate the transfer, with or without their blessing.

dunstonh

This is right. I have never seen an IFA refuse to do something. Let's be honest.

I've known plenty refuse. Especially on high risk areas. Some through discussion with them and others where a potential client has approached me and said another adviser wouldn't do it. However, that is more common in the last 5 years than perhaps 10-20 years ago where you did everything.

Now, for the IFA to sign an application form he can earn the same amount again (potentially), he will. The client insists, so better you get the fee than some other IFA.

Problem is that cost of putting right, potential fines and PI costs and excess means that its not worth taking those risks for many advisers. Plus, it may come down to the adviser's position. I suspect that it can depend on the internal compliance of different adviser firms. Some do not use external compliance and some appear to have very little, if any, external /third party compliance influence and the adviser does everything themselves. They may well be willing to take on more risks with their business than those that get their compliance handled by an external company/third party. There is also the comfort level of the adviser. An adviser that is well established for many many years can dictate what business they do or do not wish to transact. A newer adviser or one that does not have financial comfort may be willing to take on business that others reject.

xylophone

Thanks for the advice so far, the problem I have is trying to decide whether to transfer or not before the government ban these transfers next April as suggested.

Not advice - just suggestions!

Where you have such an important decision to make, then qualified advice specific to your situation would be desirable and has been discussed above; virtually any receiving scheme would require you to demonstrate that you had obtained such advice in the case of a DB pension transfer.

http://www.ft.com/cms/s/0/084f514a-b8d3-11e3-835e-00144feabdc0.html#axzz35ApEFXL2 might be of interest


Pension firms cautious on final-salary transfers
By Josephine Cumbo
"Final-salary scheme members looking to take advantage of pension freedoms introduced in the Budget face a struggle, with insurers reluctant to accept unadvised transfers amid concerns of a fresh mis-selling scandal."



“If individuals are insistent on going ahead without advice or acting against advice then they could find it harder to find a provider who will accept their transfer as providers are far more cautious and wary of a potential mis-selling claim.”

http://pensionsandsavings.com/uncategorized/response-to-budget-consultation-on-transfers-from-db-to-dc-schemes/ might be worth a look.

atush

xylophone wrote: »

Not sure that this would be the case if the parties are unmarried?http://www.lawontheweb.co.uk/Family_Law/Cohabitation

If their name was on the deeds, or on the mtg then they would own half?

atush

mania112 wrote: »

You're also not explaining what you mean by signing it off (and I can't see anything in the links that helps either).

Only IFA's with a certain level of qualification can transact a transfer (I think that's what you're trying to show in the first link) and yes, as per your second link, you should always seek advice.

What i'm saying is an IFA doesn't need to recommend a transfer to make the transfer.

Unfortunately, or not (for the client or an IFA who wants to make a few quid), that's fact. I'm just trying to clear up the hazy term 'sign off'.

Sign off means effect the transfer, recommended or not.

And could be an automatic missale so any IFA would balance the risk of that missale with any fee received. Many would not touch it fo that reason. Esp if this is a case where a cohabiting partner could receive the pension and there is a dependant. Some would recommend a transfer in the case of a single non cohabiting person w/o dependents.

atush

To say 'you'll struggle to find an IFA who will sign this off' is rubbish, honsetly

Sorry, but given the existance of upheld complaints in the above cases where the advisor said DONT DO THIS and yet the client did anyway. Earlier references to this on the forum, as the ombudsman/complaints process found the client to be basically a numpty and made the advisor pay anyway.

As long as this continues to happen (and I perceive it will happen more often with the new regs) then IFAs will refuse to sign off if the client goes against advice.


Where else in t he world can you sue if you don't take a professional's advice?

Refuse an Op and you can't sue the doctor when you get worse/die. Refuse to pay your tax that your accountant says you owe, and you cant sue him? Refuse to do what a court order says, and you can't sue your solicitor if fines increase or you are arrested?

xylophone

If their name was on the deeds, or on the mtg then they would own half?

There is no indication that this would be the case, particularly as the OP mentions an inheritance for the child - it would be possible for the OP to be sole owner and leave the property to the child but with a life interest to the partner.