Forced to get an Financial Advisor

cganesh

I am trying to transfer an old pension to my existing pension pot. I have sent off all the forms but have just had a call to say I cannot do this as an individual without authority from a Financial Advisor. Why do I have to have one and does it cost me money. If it's free which it cant be , how does a Financial Advisor get paid?

jem16

cganesh wrote: »

I am trying to transfer an old pension to my existing pension pot. I have sent off all the forms but have just had a call to say I cannot do this as an individual without authority from a Financial Advisor. Why do I have to have one and does it cost me money. If it's free which it cant be , how does a Financial Advisor get paid?

A financial adviser will not be free and you will have to pay for his advice.

What kind of pension are you trying to transfer? Is it a Defined Benefit pension - ie usually a final salary pension? Or is it a Defined Contribution scheme with an actual pot of money?

If it's an Occupational pension that you're trying to transfer then often firms will require authority from an IFA that you're doing the right thing. If it's a Defined Benefit occupational pension then you must have advice and usually it is not in your best interests to transfer it.

dunstonh

Why do I have to have one and does it cost me money

If the pension you are transferring into is not available direct then it requires it to be transacted via an intermediary. An intermediary is an adviser or firm that takes on the retail liability. Think of them as a shop and the pension as a product.

Some products you can buy direct. Some require you to buy via a shop. Pensions are the same.

Some pension types will still require you to seek advice even if the pension is available direct. Typically occupational pensions where the regulator takes the view that they are mis-sold unless proven otherwise or if you are using investments that do not pass their internal checks or you have asked questions or for something they are not authorised to give answers to - such as investment fund selection but an adviser would be.

An adviser will cost money. you pay for that (although it can come out of the pension. This may or may not be more expensive than using a direct option that has commissions built into it which could be higher or lower than an adviser fee.

atush

It sounds to me as to Jem that you may be trying to transfer a DB/final salary type pension. which 99% of the time, is not a good idea. hence being forced to see someone who might tell you this?

jamesd

Which firm is saying that you need an IFA, the sending one or the receiving one? What type of pension are you transferring from and to, is either defined benefit like final salary or a section 32 plan?

cganesh

It is an old pension scheme from a firm I worked for over 20 years ago and it has a guaranteed transfer of a large amount that can apparently be transferred now to any other personal pension plan. They have sent me all the forms to do this and the form to go to the accepting company, the prudential to be added to my pension pot. Everything seemed straightforward but now the pru say they cannot accept it unless it is thru a financial advisor. WHY? So I have to pay someone just to say ok, you are allowed to do that?

cganesh

PS There is nothing on any of the forms that say this and I think its a bit of a cheek. I should be allowed to do what I want with my money. Jobs for the boys if you ask me!

cganesh

PPS.So why isn't it a good idea atush?

dunstonh

It is an old pension scheme from a firm I worked for over 20 years ago and it has a guaranteed transfer of a large amount that can apparently be transferred now to any other personal pension plan.

The word "guarantee" would put firms on guard. Guarantees are usually lost on transfer.

Everything seemed straightforward but now the pru say they cannot accept it unless it is thru a financial advisor. WHY?

1 - Pru only accept transactions via an intermediary
2 - They are probably on guard due to the type of pension you are trying to transfer.

So I have to pay someone just to say ok, you are allowed to do that?

Because a) you may not be able to do it b) even if you can, it may not be the best thing to do and c) they retail their products via intermediaries not direct.

For the moment, I am going to ignore the fact that an old Pru policy is likely obsolete and even if you can increment it, it probably wont be a good idea. (what you are doing is probably more expensive than an adviser doing it)

I think its a bit of a cheek. I should be allowed to do what I want with my money. Jobs for the boys if you ask me!

You are allowed to make bad decisions. The regulator tries to prevent you making truly awful decisions by putting safeguards in place.

xylophone

Are you trying to transfer a deferred final salary/defined benefit pension?

https://forums.moneysavingexpert.com/discussion/comment/66055158#Comment_66055158

cganesh

ok its the Pru who is receiving the money .
I am not apparently allowed to make bad decisions, or any decisions without paying for someone else. Incidentally, I am not stupid and I should be able to make my own financial decisions!
Guarantees are usually lost on transfer? Really? How?
It is an ordinary pension from a reputable company, (well Barclays-lol)that still exists.
I have been told by the pru that its all ok but that it needs to officially go via an IFA. There are no fees or tax payments associated with it so I would have to pay nothing extra,( oh except I can't because I have to pay an adviser), so 'incrementing it would not be more expensive'