Transferring a Defined Benefit Fund

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.

Sorry, I should stop now. Clearly you are a highly qualified individual . However, clearly lacking in humility and. Truly believe the hype you have created around your own self worth.

You must be a joy to live with!

jojororo

As much as I'm enjoying the tangents my thread has taken, I have a further question. I went back over my paperwork for this case last night and noticed the following.

This is what was stated in the letter from the current fund holders.

We need the following statement in writing on the advisors header paper.

"I can confirm that <my name> has taken advice from us when considering the transfer from their defined benefit fund to a defined contribution basis. We are professional financial adviser, authorised by the FCA and are independent from the defined benefit fund"

So, if this is all they need in the letter I assume that the IFA doesn't have to actually state in the letter whether they recommend the transfer or not.

Obviously they still have to review my case in order that the. letter be accurate BUT I don't see why this cannot be done in a couple of hours within a consultation. As stated before it seems crazy that I have to go thru' a detailed investigation when I only need high level advice. If the IFA wants to cover their ar*es then why not can't they send me a separate letter following the consultation saying something along the lines of it is generally not recommended to move from a DB fund but they would need to do a full investigation before they can say one way or the other.

kidmugsy

jojororo wrote: »

Obviously they still have to review my case in order that the. letter be accurate BUT I don't see why this cannot be done in a couple of hours within a consultation.

I imagine that they wouldn't want to stake their financial future on some stranger (i.e. you) proving to be a rat and setting the regulator on them if your plans come unstuck.

dunstonh

If people that do not have a clue about what is required nowadays say silly things about someone else, it is not surprising that they become defensive.

Personally, I wouldn't do an occupational pension transfer for £2000. it is just crazy.
1) Most occupational pension transfer complaints at the FOS get upheld. So, its very high risk.
2) the excess on occupational pension transfer is £5000 on my PI. Plus, if you do occupational pension transfers, your PI insurance jumps up in price a lot every year forever.
3) it requires higher qualifications to be able to do it. If someone has taken the time to get to a degree level qualification then you are paying for that specialist training (as you do in all walks of life)
4) The increased regulatory requirements and costs have to be paid for.
5) the work required nowadays for doing even simple things is just silly. A fund switch may take 3 minutes if done electronically. However, the work to get to that point can take 3-4 hours. I had a portfolio rebalance take me almost two days recently It is excessive and most of it unnecessary other than to satisfy the regulator, the ombudsman, third party file checkers. All of whom often have different views on what you should or should not have documented. I look at the size of a client file today compared to 5 years ago, let alone 10 or 15 years ago and its staggering the amount of difference. Most of it is backside protecting.

If I see an adviser doing it for £1200 or so then I am just staggered at the risks they are taking. My guess is that they are desperate for the money and will do anything to get it.

dunstonh

So, if this is all they need in the letter I assume that the IFA doesn't have to actually state in the letter whether they recommend the transfer or not.

A suitability report is a requirement. Without that, its almost certainly an uphold decision on a complaint.

As stated before it seems crazy that I have to go thru' a detailed investigation when I only need high level advice.

TH178 is a full service adviser. That is his business model. It is a high quality model focusing on high net worth clients who value full life planning. You dont need that level of advice but if you approach an adviser that operates that business model then that is what you get. You can limit the advice if the adviser is willing to do it. However, in the case of retirement planning where you are looking to give up an option which is considered the best option in most cases, then looking at what you need, how what you have will deliver it and what an alternative can deliver in the short term, medium term and long term is common sense.

If the IFA wants to cover their ar*es then why not can't they send me a separate letter following the consultation saying something along the lines of it is generally not recommended to move from a DB fund but they would need to do a full investigation before they can say one way or the other.

That would not be good enough. Remember that the FOS does not accept disclaimers, even when signed.

People that complain dont think they are going to complain when they buy a product or do a transaction. Its only when they find out later that they have lost £x that they complain. And you tend to find honesty goes out of the the window in those cases as they will say anything that helps their case whether it is true or not. I know that is a big generalisation and I am not thinking of those with genuine complaints there. However, when people see pound signs and claims company phones up telling them they have been mis-sold and can get thousands, their greed will take over and you are at the mercy of a very liberal ombudsman.

During the pension mis-selling years of 88-94, I doubt hardly any of those pensions were mis-sold with malice. I missed those years thankfully but I know that companies that used actuaries for the calculations and had consumers telling them that they wanted to do it who then complained later when they realised the cost and the companies had to pay out. This seems to be going full circle and repeating itself. In the late 80s, the Govt advertised encouraging people to transfer their pensions and opt out. In the 90s it was found to be wrong (with hindsight). Now we have the Govt effectively doigng it again and consumers doing it again. How long is it going to be this time before hindsight complaints start rolling in?

sandsy

jojororo wrote: »

Obviously they still have to review my case in order that the. letter be accurate BUT I don't see why this cannot be done in a couple of hours within a consultation.

The government (in its wisdom) has decided that you must take regulated advice and the regulator (in its wisdom) has determined that the full advice process for transfers must include a transfer value analysis undertaken or checked by a pension transfer specialist in addition to the normal advice process of considering the suitability of any proposed course of action.

bigadaj

This is a complicated process, largely unnecessarily so, and just evidence of the extreme nanny state we have accrued.

If an individual wants to access a valuable pot, then given sufficient warnings about the risk and likely drawbacks in doing so then why should they be able to?

If the individual then blows that pot then that should be up to him, with some caveat about no recourse to public funds or similar.

I think through that the very large sums provided within cetv projections is both turning heads and providing a real issue for funds. We are probably near a high for these numbers given interest rates and yields on gilts so it is opportunistic to cash in on these currently. Taking this sum now would also adversely affect the db scheme given the difference between the current sum and the length of time to normal retirement.