How do I check an IFA ?

itch_for_a_glitch

I'm considering switching from a final salary scheme to a SIPP, and am going to consult an IFA.
How can I check he is qualified ?
If I ask him to transfer my pension to a SIPP(and he agrees), where will the funds be held ? And who will control them ?

Thanks in anticipation.

Linton

Checking an IFA...

You should be able to find them on https://www.unbiased.co.uk. Also you can check on the Financial Services Register to confirm they and/or their company are registered.

Where are funds held in a SIPP?

A SIPP operates much like an S&S ISA. The money/investments will be managed by the SIPP company but wont belong to the company. So they wont be at risk should the SIPP manager go bust. If you invest in funds, the money is managed by the fund manager, but again not owned by them.

The control would be by yourself or you could pay the IFA to do it.

Aegis

itch_for_a_glitch wrote: »

I'm considering switching from a final salary scheme to a SIPP, and am going to consult an IFA.
How can I check he is qualified ?

Linton wrote: »

Checking an IFA...

You should be able to find them on www.unbiased.co.uk. Also you can check on the Financial Services Register to confirm they and/or their company are registered.

Just to add to this, you ought to consider checking whether the adviser has the AF3 qualification or equivalent, as that is the advanced pension planning exam. Whilst this is not a guarantee of quality, it will at least show that the adviser has made a commitment to demonstrating a greater than average understanding of pension matters.

xylophone

If the value of your DB pension is greater than £30,000.you will need advice from an IFA with the necessary permission.


http://www.fca.org.uk/firms/financial-services-products/investments/pension-transfers

"Our rules (COBS) require firms advising on pension transfers to have a specific permission – advising on pension transfers and opt-outs. Firms who wish to carry out pension transfer business must apply for this permission. If a firm does not have these permissions, they cannot undertake this activity.

In addition to the firm having the required permission, the advice must be given, or checked by, a pension transfer specialist. A pension transfer specialist must follow our training and competence rules, and have the necessary qualifications and with that, the permission to perform the function. You can select this exam from the List of Appropriate Examinations maintained by the Financial Services Skills Council (FSSC)."

http://pruadviser.co.uk/content/knowledge/technical-centre/pension_switches_transfers/#2

dunstonh

If I ask him to transfer my pension to a SIPP(and he agrees), where will the funds be held ? And who will control them ?

That is between you and the adviser.

However, be aware that statistically, only 1 in 10 defined benefit transfers are likely to be deemed good advice. So, there is a strong probability that you will be told that it is not in your interests to transfer the pension. In that case, you end up paying a bill to be told not to transfer.

Why do you want to transfer it?

itch_for_a_glitch

dunstonh wrote: »

That is between you and the adviser.

However, be aware that statistically, only 1 in 10 defined benefit transfers are likely to be deemed good advice. So, there is a strong probability that you will be told that it is not in your interests to transfer the pension. In that case, you end up paying a bill to be told not to transfer.

Why do you want to transfer it?

Thanks.

The IFA rang this morning, and has emailed me "statutory notices as required by the regulator" he discussed my financial position and attitude to risk.
I have emailed him the benefits of the scheme I am currently entitled to at various ages going forward. He is going to crunch some numbers to see what sort of performance is required to match the scheme benefits.
Why transfer it ? I have health "issues" that my DB scheme doesn't take account of..

TH1878

dunstonh wrote: »

That is between you and the adviser.

However, be aware that statistically, only 1 in 10 defined benefit transfers are likely to be deemed good advice. So, there is a strong probability that you will be told that it is not in your interests to transfer the pension. In that case, you end up paying a bill to be told not to transfer.

Why do you want to transfer it?

I'm not convinced that the 1 in 10 rule is particularly accurate given the new pensions freedoms.

Just this week, I've looked at three married people in the late 50s / early 60s with health issues (who in all likelihood won't make it to age 65, never mind 75) - the critical yield based on the spouse's pensions was between minus 2% and minus 3% pa

Obviously plenty of other considerations but with transfer values as high as they are, and the new rules, I'd say it was closer to 3 or 4 in 10

dunstonh

I'm not convinced that the 1 in 10 rule is particularly accurate given the new pensions freedoms.

Given the currently increased valuations seen on CETVs and the new options, you are probably right.

Although it is still likely to be a minority outcome. Best to be on guard.

Why transfer it ? I have health "issues" that my DB scheme doesn't take account of..

And that can be one of the good reasons.