Deferred IFA

bigadaj

orwen wrote: »

In reply to bigadaj

Many thanks. You can't question the questions on a questionnaire. I told both IFAs that I do not want to take more risks than I am currently taking by investing in HL. The last risk questionnaire was vague in terms of semiotics. How do you define 'high risk', 'medium risk', 'low risk'? These are all relative concepts, abstracted they mean everything or nothing, they also alter in context I feel.

The questions are psychological and subjective rather than quantitative, you can review your current investments in hl or plug them into trustnet and get an indication of risk tolerance. The ifa questionnaire is a basic way of generally assessing people, the reality being a tolerance of loss, so whether your funds lose 20%, 40% or more until you panic and sell, or whether you are comfortable holding tight in the probability that they will recover and outperform in the longer term.

greenglide

I do not want to take more risks than I am currently taking by investing in HL.

But does that actually convey anything? You may think it is low risk, others may think it is high risk and there are, of course, many forms of risk.

In my day job we get requirements from our customer to specify what they want done. They love to say that they want the xxx to be processed in the same manner as existing processing in yyyy. The reason for specifying this is because they don't actually know all the business rules that the yyyyy process has but they are sure they want the new stuff to "just work" in the same way. We can understand the reason why but it carries huge risks for both parties and generally ends up in trouble when we are stupid to go ahead on that basis..

orwen

xylophone wrote: »

OP, you and the IFAs seem to be making a meal out of this.

Couldn't agree more.

From all the information in your previous posts https://forums.moneysavingexpert.com/discussion/5244566

it appears that you are the outright owner of a property, that you are currently single, that you are now (at age 60) in receipt of a TPS pension of around £6000 a year (and presumably received a lump sum of £20,000 ), had a small AVC (now transferred to your HL SIPP?), some thousands in cash within a Santander 123 and a portfolio of funds within an HL Vantage ISA and a Vantage Account.

I suggested to HL over a month ago that I transfer the AVC to my HL SIPP, they seemed ultra nervous about this and asked me if I'd consulted an advisor? That was as far as I got, so the AVC is still with the Prudential.

You have taken the PCLS from the SIPP.

Negative. The SIPP has not been accessed. I was hoping all this would be sorted by now, by engaging an IFA - but all I get from IFAs is informed by them of how very good they are with caps and allowances, I am frankly exasperated.

You expect to receive your state pension in 2022 when you reach 66.

Affirmative.

You have obtained a state pension statement which shows that owing to the Contracted Out Deduction, your starting amount is less than a full new state pension; you intend to contact DWP about making voluntary Class 3 contributions up to your state pension age to address this.

I just obtained a new online statement / forecast, I have yet to ask again about the Class 3 contributions.

At the moment, you are not in employment and may not consider employment so that you need to explore funding your lifestyle from your TPS pension/capital/investment income/SIPP until state pension age and then beyond.

Affirmative.

It should not be beyond the capacity of a competent IFA to advise on the above - otherwise you work out your own budget on the basis that you know your expenses and calculate what what you need to draw from capital on top of your investment income?

The IFAs refuse to look at the very practical nature of my enquiry - which would entail employing them - and go off on flights of figure virtuosity which I basically comprehend but am left extremely frustrated that all the practical points you have identified are sidelined by "well, how many risks are you willing to take?" I did not approach the IFA industry to have them coach me for the casinos, I have very real concerns and insecurities regarding my future years and so have attempted to seek out professional advice. I am still seeking.

When I tried to take matters into my own hands and transfer my AVC to my HL SIPP I got nowhere. Was this also HL attempting to coax me into accepting professional advice from them I wonder?

You may wish to look at IHT planning - presumably you have covered this (and making a will) with your solicitor, particularly in view of the difficulties you experienced with your mother's estate?

My current solicitor is now in the process of addressing any IHT shortfalls due back to me. I have made a will with a solicitor.

In short, it seems to me that I should activate the SIPP to cover what my first IFA described as the 'lean years' between now and when my state pension comes in; my TPS currently covers my basic outgoings. The AVC could go into the SIPP, can't see why not? I need an emergency fund (savings account) and the optimal amount in my 123 to guarantee cash-back and interest. Depending on what Gov.UK say I can look to identify funding to match what is missing from the NICs if practicable. I have a horrible suspicion that doing so may have been made that bit more difficult to do by the Chancellor, but I haven't explored this yet.

I need to get my head round annual tax allowances and so forth, that shouldn't be beyond me, I have a GCSE O Level equivalent in Mathematics, bit rusty but the potential is there.

Must say. I was gobsmacked when HL demurred over my transferring the TAVC to my HL SIPP, were they touting for their own financial advisory service I wonder? In which case they have set me backwards a month :-|

jem16

orwen wrote: »

Negative. The SIPP has not been accessed.

PCLS = Pension Commencement Lump Sum or in other words the tax-free lump sum which you told me you had taken.

The IFAs refuse to look at the very practical nature of my enquiry - which would entail employing them - and go off on flights of figure virtuosity which I basically comprehend but am left extremely frustrated that all the practical points you have identified are sidelined by "well, how many risks are you willing to take?" I did not approach the IFA industry to have them coach me for the casinos, I have very real concerns and insecurities regarding my future years and so have attempted to seek out professional advice. I am still seeking.

The IFAs are actively trying to gauge your risk profile which is necessary to do their job properly. Risk, as explained earlier, can be quantified differently by different people.

When I tried to take matters into my own hands and transfer my AVC to my HL SIPP I got nowhere. Was this also HL attempting to coax me into accepting professional advice from them I wonder?

No they were trying to cover their own backsides as it's an AVC and could still have had links to the main scheme which were better for you.

Depending on what Gov.UK say I can look to identify funding to match what is missing from the NICs if practicable. I have a horrible suspicion that doing so may have been made that bit more difficult to do by the Chancellor, but I haven't explored this yet.

Remind us what the forecast said? How many years NI do you have?

maximumgardener

If OP wants "no/lower risk" , then perhaps he should look further at getting an annuity purchase for all/some of his £250K ?

OP seems very risk averse from these posts...... so maybe consider use £170k for annuity and put balance into drawdown??

HL have calculator on their web site where you can see income from this approach.

discuss with your appointed IFA. get the fees agreed!

dunstonh

I suggested to HL over a month ago that I transfer the AVC to my HL SIPP, they seemed ultra nervous about this and asked me if I'd consulted an advisor? That was as far as I got, so the AVC is still with the Prudential.

Sounds like you are using HL for their non-advice service. Not their advised service. AVCs are occupational pensions by default and fall under a different remit and required more work and authorisations (although that is currently undergoing a change).

Negative. The SIPP has not been accessed. I was hoping all this would be sorted by now, by engaging an IFA - but all I get from IFAs is informed by them of how very good they are with caps and allowances, I am frankly exasperated.

This is in part because 1) you haven't employed them do that. 2) it would require a move away from HL (very easy to justify but would require documentation from HL which would need to be obtained once you employ the IFA)

I did not approach the IFA industry to have them coach me for the casinos, I have very real concerns and insecurities regarding my future years and so have attempted to seek out professional advice. I am still seeking.

Risk assessment is one of the most important things an IFA can carry out with investments. An IFA cannot give investment related advice without risk being considered.

When I tried to take matters into my own hands and transfer my AVC to my HL SIPP I got nowhere. Was this also HL attempting to coax me into accepting professional advice from them I wonder?

its because of the classification of the product as mentioned above.

We seem to be getting to the stage where you want an IFA to give you solutions without the IFA being in a position to know the issues that need solving.

I need a vehicle that sits 5-7 people. Can you recommend a vehicle for me?
- Sounds like you need a large 4x4 or people carrier. I recommend a Land Rover Discovery.
Great. Can you get that for me.
...vehicle arrives.....
This vehicle is really great but how do I use it to fly to the offshore oil rig where the 5-7 people work?

The problem with only having part of the story is that the solution may fit the part you know but it may not fit the part you dont know and is being withheld.

xylophone

Negative. The SIPP has not been accessed.

You stated in an earlier thread that you had accessed your SIPP.

Thanks & will reply more fully later. You might laugh but my biggest concern right now is to see that mum's little dog has enough to eat, that's why I drew down £2.5k from my SIPP. That keeps me hopefully going through the probate period whereby I can make basic provision for myself and the needs of the dog, who is rather old, and now fretful. Food is the basic thing I can provide to keep her spirits up

On MSE I found references to 'drawing down' funds from a SIPP, if over the age of 55. I faced and face a very uncertain time between my mother's sudden passing and the eventual & hopeful granting of probate. With funds dwindling fast I went for the draw down option. I stipulated that the draw down was to be a one-off withdrawal with 'nil' payments afterwards, so there's no formal 'change in circumstances', no regular income. In other words, I am not drawing the pension and I have not retired, I'm 59. The draw down got me a tax free 25% sum of 2.5k which was transferred directly to my shrinking bank account. The rest of the draw down amount remains in the SIPP because of the 'nil income' option which I chose.

xylophone

Sounds like you are using HL for their non-advice service. Not their advised service. AVCs are occupational pensions by default and fall under a different remit and required more work and authorisations (although that is currently undergoing a change).

The OP's deferred TPS pension is now in payment.

The small AVC fund , apparently around £10,000 (discussed here)

https://forums.moneysavingexpert.com/discussion/5244566

is still with the Pru.

I am mystified as to why it is proving so difficult to move this small DC to the SIPP?

greenglide

So these are AVCs attached to a DB scheme which is in payment? The holder of the AVCs (the pru? ) would normally have expected these to be used to purchase an annuity (there own or whole market) or to transfer out to another scheme.

Under these circumstances I would have thought neither the gaining scheme or the pru would have any issues with this?

jem16

greenglide wrote: »

So these are AVCs attached to a DB scheme which is in payment?

Yes although the attachment to the scheme was merely in name after 2006. There was no other benefit.

The holder of the AVCs (the pru? ) would normally have expected these to be used to purchase an annuity (there own or whole market) or to transfer out to another scheme.

Originally, yes. However the Pru had opened up some of the more flexible options after April 2015.

Under these circumstances I would have thought neither the gaining scheme or the pru would have any issues with this?

HL were covering their own backsides and wanted it done with advice via an IFA.