Can its say no to pension transfer from final salary to sipp

dunstonh

So likely senario is I incur a large fee just to be told that the transfer is not recommended (likely as most just wont want the risk of comeback) and therefore waste my money.

Historically yes because the historic position is that 4 out of 5 people end up worse off by transferring out. However, with high transfer values at this time, it is easier for many decisions to be yes to transfer.

Of course the likelihood of a positive recommendation to transfer would increase dramatically for someone with a large pot and who is willing to reinvest through the IFA. So much for independent advice.

That is not the case.

In short this change is legislation is only of any use to the very wealthy - i shouldn't be too surprised at that now should I.

What change in legislation?

What does seem strange is that it is the receiving pension company that seems more concerned that you get a positive recommendation. Logically I would have through it would be the donor pension that would be more concerned.

Historically, the FCA have treated DB transfers as mis-sold unless proven otherwise. The FCA has also made it clear that insistent clients and execution only are not reasons enough to allow a firm to transact where they know that the transaction may not be in the best interests of the individual. However, it has also muddied the waters by saying different things to that at other times. Such as saying that the insistent client process is adequate. There have also been a number of decisions in recent years where execution only cases have gone against the pension provider despite them not being involved in the advice process.

You have an inconsistent FCA and FOS saying different things at different times. Both of which are prone to moving the goalposts many years later. So, it is no surprise you see firms not wanting to take on risks that could blow up in their face years down the road.

bikeman

dunstonh wrote: »

What change in legislation?

I think you know that I am referring to the new pension freedoms giving access to DB pensions.

Sony_smartphone

Get your point completely about the donor company and I agree with you,,,,I cannot understand why the donor providers dont offer their members the full range of options,,,ie flexi drawdown etc,,, then joe public wouldn't, need to transfer out at all,,,,,,,,or maybe its just my naive thinking,,,,

Silvertabby

“ What change in legislation?
Originally posted by dunstonh ”
I think you know that I am referring to the new pension freedoms giving access to DB pensions. Posted by bikeman

No such thing. The pension freedoms specifically excluded DB pension schemes. Transferring DB benefits to pension freedom compliant schemes is another matter altogether.

dunstonh

bikeman wrote: »

I think you know that I am referring to the new pension freedoms giving access to DB pensions.

There was no change on the ability to transfer DB pensions. The pension freedoms only modified existing rules that had been in place for over a decade. You could have transferred a DB scheme in 2006 to a SIPP/PPP and gone into drawdown then if you wanted.

Get your point completely about the donor company and I agree with you,,,,I cannot understand why the donor providers dont offer their members the full range of options,,,ie flexi drawdown etc,,, then joe public wouldn't, need to transfer out at all,,,,,,,,or maybe its just my naive thinking,,,,

Defined benefit schemes are providing a range of defined benefits. Whey would they want to offer options that they not specific to their contract? Can you imagine the costs involved to facilitate such a thing when it is only a tiny proportion of their members that would utilise it? You are talking many millions of pounds. Who will pay for that?

Linton

Sony_smartphone wrote: »

Get your point completely about the donor company and I agree with you,,,,I cannot understand why the donor providers dont offer their members the full range of options,,,ie flexi drawdown etc,,, then joe public wouldn't, need to transfer out at all,,,,,,,,or maybe its just my naive thinking,,,,

The issue isnt changing the company managing the fund. It's the danger of pensioners giving up DB guarantees which most probably dont understand are extremely valuable, especially as achieving an equivalent income after transferring out the CETV requires the money to be managed moderately competently. Something that most pensioners wont have the experience to do.

dunstonh

In todays financial press you have Chris Hewitt, the FCA's technical specialist saying "We do think advisers shouldn’t be order takers." in respect of the pension freedoms. On insistent clients who wish to transact against advice, dealing with these recommendations was a “commercial decision” for the firm.

So whether you like it or not, you can at least see why firms are nervous when the FCA will not give clear and concise statements about its position.

xylophone

So, your point is mute.

Dumb?

A moot point........:)

MichaelH2018

Hello,

Some have obviously put on a lot of work and found both good and reasonably priced IFAs. I have been trying for 1 week now to find one to help "approve" a transfer of a 200k DB plan into a SIPP scheme. I have been quoted high prices but also to my surprise I was also rejected altogether. I have been an IFA 15 years ago myself, for a short time and in finance and investments, as investment manager, for a long time, but have no contacts that were of any use.
I am keen to do that as I can manage the money in a defensive way. Can someone please kindly recommend an IFA with low fees, to legally approve the transfer, I have arranged all the rest, SIPP provider etc.
Many thanks

Aegis

MichaelH2018 wrote: »

Hello,

Some have obviously put on a lot of work and found both good and reasonably priced IFAs. I have been trying for 1 week now to find one to help "approve" a transfer of a 200k DB plan into a SIPP scheme. I have been quoted high prices but also to my surprise I was also rejected altogether. I have been an IFA 15 years ago myself, for a short time and in finance and investments, as investment manager, for a long time, but have no contacts that were of any use.
I am keen to do that as I can manage the money in a defensive way. Can someone please kindly recommend an IFA with low fees, to legally approve the transfer, I have arranged all the rest, SIPP provider etc.
Many thanks

When you ask for an IFA to "approve" a transfer that you have set up for yourself, you are actually creating more work than normal for them because they have to sense-check what you are doing at every step. In other words, they have to check that your SIPP trustee is reputable and suitable, they have to analyse your investment selections to see whether they are a good idea, and they have to check to make sure you are not being misled into unregulated nonsense. Given the size of the transfer value is not the highest (it's a respectable sum, but it's lower than most advised cases for final salary scheme transfers) they may well be turning you down because the fee would be disproportionately high when taking into account the extra work needed to accommodate your preferences rather than the providers and investments they use for the majority of their clients (which will of course already have been fully researched).


I'm sure someone somewhere will do it, but when you consider the above you may realise that you aren't actually helping by mapping out everything you want on the other side of the transfer, and many advisers will (understandably!) be scared of arranging transfers where they will not be managing the investments on the other side.