Transferring a Defined Benefit Fund

atush

You can ask for a fee based service, not a %

Credit-Crunched

TH1878 wrote: »

I wouldn't take you on as a client (no offence - our business is based around lifelong financial planning, not transactional advice) but if I did, the process would be something like this:

Initial Discovery Meeting : 2 (or more) hours if done properly.

Scheme specific research : 2 hours

Construction of a financial model (using cashflow modelling tools) : around 6-8 hours depending on complexity

Research of a suitable provider and investment strategy : 1-2 hours

Second meeting to review and agree your cashflow plan including your preferred withdrawal strategy. This would include a detailed discussion of the risks involved : 2-3 hours

Report : 4-6 hours depending on complexity (I try and keep reports short and my defined benefit report is around 30 pages long! Blame the regulator.)

The automatic starting place for the FCA / FOS is that Defined Benefit transfers are unsuitable. Advisers don't have a long-stop so they are liable for their advice until the day that they're put in the ground - so a risk premium is usually added to any risky business such as DB transfers.



Look for the G60 or AF3 qualification.

Ha ha, who you kidding! 8 hours!!

I get the time scales for the reports and meetings, but come on now, if you are spending 8 hours on construction, you either to invest in some new software, or speed up that mouse click!

davide691

15 of the 16 pages of my IFA’s advice letter were basically a*se covering. And he farmed out the number crunching to an external specialist who input a few numbers, pressed a button and churned out 26 pages, including some pretty charts. Nice “work" if you can get it!

atush

They need to cover their ar*e from you claiming against them.

Their Ar*e is hanging out to the tune of the size of your portfolio.

dunstonh

15 of the 16 pages of my IFA’s advice letter were basically a*se covering.

Absolutely should be. Given the default position is mis-sold unless proven otherwise, it is no wonder.

And he farmed out the number crunching to an external specialist who input a few numbers, pressed a button and churned out 26 pages, including some pretty charts. Nice “work" if you can get it!

And that specialist obviously did it for free and all the software was free. Are you really that naive? Do you know how much specialists cost?

Perhaps if you studied harder and put more effort in then you could earn more too.

agarnett

Dunstonh, you are again battling on a sticky wicket and I see no real purpose to your argument other than try to justify your own existence as a expensive toll-collector/gate-keeper in the market (at your option of course!).

I am sure you are much more than that, but basically the government has coralled all those who wish to pass Go on transferring out of DB schemes so that they have to pass through a licensed gate-keeper's domain.

So you have a captive market (which I accept that you proably quite often choose not to indulge in) but nevertheless you try to defend the indefensible.

You bleat on about how studious you have to be to gain the necessary qualification to be one of these gate-keepers, but you surely realise that although such a qualification marks you as a cut above some of your peers, the study you are urging us to accept as some high achievement is not really all that in the grand scheme of things, now is it?

Is it for example as difficult to achieve and maintain as the qualification of a practising specialist who is also a Fellow of the Royal College of Surgeons? No? OK let's lower the sights a bit ... maybe as difficult to achieve as an MD and as necessarily studious as a GP needs to be throughout their career? Not quite? OK. How about it being similar to the study made originally and necessarily continuing for a practising Chartered Accountant? Still too high ? Alright then, what about a Fellow of the Chartered Institute of Bankers? (do they still have those I wonder?). A lawyer ? A QC maybe? Maybe still a little too high compared to what you need to whistle out in 8 chargeable hours as a Chartered Financial Planner with G60 or the other tag? Or a conveyancing solicitor then? Is it comparable perhaps with those Home Inspectors who know how to rate your home and produce a report you can give to those who are considering buying your house? Sorry that one is maybe a bit of a lowball! How about Fellow of the Chartered Insurance Institute then? Are they still a cut above the CFPs? Or are some CFPs pari passu with FCIIs and ACIIs now or even on a higher plane? Industry gold standard I read somewhere. I guess they might be it. Everyone wants to be a known as professional, and/or expert and/or specialist don't they?

But then you spoil it by suggesting that there is a price for software? Don't you CFPs know how to use Excel? Maybe not.

You know what software is the leading software for producing the reports. You know where to buy the Professional Indemnity insurance and keep it bought. You no doubt know how to further distance your personal assets from future claimants. So, you are ready to charge "specialist" prices, and as for the risks, you are clearly alert.

You spy the captive market, your country needs you, you have your protective shield (PI cover etc) and your software tool. Lerts and experts only need apply - there's specialist business to be had and at the prices the market has managed to pitch as "the norm" then you can even cherry pick all you need do then is turn the handle - but of course, its far more complicated than that, it's specialist work

Whatever floats your boat, but really, if you were the really serious studious type, would you ever have ended up in financial services shuffling paper? I was pretty studious in my time. Still ended up originally in financial services shuffling paper and not building rockets! Applied a lot more study too for a while, over the decades in various fields, but really, it just isn't what the industry is about, is it? It's not a "profession" in the truest sense. It's just a constantly changing money-making market. You go where it takes you, if you want to stay part of it, and not the other way round.

The most generous interpretation I could put on the comparison with other types of study is perhaps the Royal Yachting Association Yachtmaster (sail) qualifications. You understand the prevailing wind hereabouts, and it is an opportunity to do something you enjoy and to feel good about in life. Not quite like being an airline pilot who loves flying, but a bit like being up front and being seen to hold many of the cards. Fair dos! So maybe the RYA Yachtmaster coastal qualification, and not quite the ocean level of qualification because I have not seen much in the way of cross border pension advice from too many FAs in these parts - the difference between dropping off DB into DC seems to be the most serious no go border that gets discussed - sounds a bit flat earth in fact

TH1878

Credit-Crunched wrote: »

Ha ha, who you kidding! 8 hours!!

I get the time scales for the reports and meetings, but come on now, if you are spending 8 hours on construction, you either to invest in some new software, or speed up that mouse click!

Oh, I didn't realise you were experienced in producing full and thorough financial plans! One that doesn't just look at the pension in isolation but everything to do with the client.

So, you'll know that we look at everything a person owns, current income, future income, current expenditure, future expenditure, current tax position, future tax position, analyse a client's Will for estate planning and producing 'What If' scenarios to model different scenarios.

If anything, I underestimated the time it takes. You have to be absolutely spot on with no errors because you are playing with peoples' futures here. A miscalculation could mean they run out of money or, worse, they carry on working for too long or don't do the things they wanted to do in life.

Of course, you could go to an IFA who wants to rush the job (e.g."Credit-Crunched Financial Services") where their fees are next to nothing but they offer a 'mess up your life' guarantee'

Do a job properly or don't do it at all. I get that you are seething because the joke about letterhead passed you by but don't compound it by making statements over something you clearly have no knowledge of.

agarnett

So, you'll know that we look at everything a person owns, current income, future income, current expenditure, future expenditure, current tax position, future tax position, analyse a client's Will for estate planning and producing 'What If' scenarios to model different scenarios.

If anything, I underestimated the time it takes. You have to be absolutely spot on with no errors because you are playing with peoples' futures here. A miscalculation could mean they run out of money or, worse, they carry on working for too long or don't do the things they wanted to do in life.

Forgive me, but that does rather sound like a spiel in a prospectus - you know, sort of hifalutin arm-waving? I am not quite sure what you mean about working too long unless you are really talking about someone who doesn't enjoy work and is under an illusion they can't afford to stop before they drop!

I don't doubt you are committed to putting what you summarise into practice, but are you able to give us any anecdotal examples you feel good about where you've had the satisfaction of seeing your plans making a lasting interesting difference (over a period of years) so readers might really get atune to the robustness of planning and good advice available from one of your reports and other specialists' reports like them ?

I am also interested in whether, as part of your reporting, you ever audit what the pension providers have been doing over the history of the various contracts and offer advice to clients on what they might get improved by challenging rather than changing, or indeed do you ever do part of the challenging?

Credit-Crunched

TH1878 wrote: »

Oh, I didn't realise you were experienced in producing full and thorough financial plans! One that doesn't just look at the pension in isolation but everything to do with the client.

So, you'll know that we look at everything a person owns, current income, future income, current expenditure, future expenditure, current tax position, future tax position, analyse a client's Will for estate planning and producing 'What If' scenarios to model different scenarios.

If anything, I underestimated the time it takes. You have to be absolutely spot on with no errors because you are playing with peoples' futures here. A miscalculation could mean they run out of money or, worse, they carry on working for too long or don't do the things they wanted to do in life.

Of course, you could go to an IFA who wants to rush the job (e.g."Credit-Crunched Financial Services") where their fees are next to nothing but they offer a 'mess up your life' guarantee'

Do a job properly or don't do it at all. I get that you are seething because the joke about letterhead passed you by but don't compound it by making statements over something you clearly have no knowledge of.

Touched a nerve there have I not, I will steal Plato's quote

“Wise men speak because they have something to say; fools because they have to say something.”

I am not seething, quite the contrary, mildy amused at your over exaggeration of the work involved in portfolio modelling.

something you clearly have no knowledge of.

Well, I am glad that you are fully aware of my professional qualifications. It may actually shock you that when I left financial services my suffix was FCII, which places me a step above the chartered level.

Full AF qualifications obtained, So i am well aware of portfolio modelling, Stochastic portfolio theory and all associated betas, sharps, alphas, co variances and other associated mathematical modelling tools.

I also realise that portfolio construction is easily modelled with simple to use software, simple entry, risk input, desired income, if any, and press a button.

I am not questioning the length of the reports, I get that, it is a arduous process, but don't eek the maximum out of every aspect of the job, it makes you look silly.

TH1878

I will respond later but where did I mention portfolio construction?

By the way, you are not more qualified - the designation after my name reads FPFS and is soon to read MSc (Financial Planning)