GAR Not wanted

Amolad

Crikey the overseers wouldn't let me quote Mr Bumble! the exclamation marks were originally typed as the last 3 letters of compass of course.

Linton

Amolad wrote: »

The reason why you will have to take advice is that the law says so


Then to quote Mr Bumble "the law is a !!!"


As far as I understand the requirement it is only necessary for the IFA to ensure that I understand and accept the risks involved ... please can you tell me where it says otherwise .. thanks.

If you want to change the law talk to your MP. But I would have thought that MPs are unlikely to risk future Daily Mail headlines of how poor ignorant pensioners were swindled out of their money because of government incompetance.

As you say, the law is that you have to get advice. But then you have to find somewhere who will accept your transfer without a positive agreement from an IFA. From reports to this forum it seems unclear as to how easy that is.

xylophone

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

may be of interest.

As Linton says, other posters have found that some pension providers are unwilling to accept a transfer without a positive recommendation from a Pension Transfer Specialist.

Amolad

Thanks for that link ...


The para:


The focus of the FCA’s requirements is to ensure that individuals switching, converting or transferring their pension arrangements receive the appropriate level of advice, provided by advisers who have sufficient knowledge to ensure the client understands the implications of the proposed action, especially when the transaction is potentially sacrificing valuable “safeguarded benefits”.

Would indicate to me that an IFA does not need to carry out "Full Advice" but simply ensure the customer knows what he/she are doing. It is my belief that many IFAs want to impose their rather more expensive services on the back of this transfer regulation.


Also I would have thought that the proportion that the transfer makes up of a person's overall pension assets should be taken into account. In my case the transfer is less than 10%.

jamesd

To blame the correct parties here, the original pension freedom law had no such requirement. It was added at the request of the Commons pension committee on the basis of them being worried in the way the FCA text describes.

The legal requirement is simply that advice is given by a suitably regulated adviser. There is no legal requirement to follow the advice, just to get it.

Then the requirements from the FCA about what qualifications are needed and the risk reduction requirements from IFA liability insurers enter the picture and cause the cost to be non-trivial and near to the threshold so high that the cost of the advice can eliminate the benefit that could be obtained from a transfer.

Following that comes the regulatory risk management decisions of the receiving schemes. This causes some to refuse to accept a legal transfer against advice to reduce their risk exposure.

Amolad

Following that comes the regulatory risk management decisions of the receiving schemes. This causes some to refuse to accept a legal transfer against advice to reduce their risk exposure.


To clarify, it is the original pension fund provider, Aegon, that is applying the regulation. In their letter they state:

"As the value of your safeguarded benefits is over £30,000 you must get advice from an IFA. Your financial adviser is required to provide us with confirmation of the advice in the form prescribed in the Pension Schemes Act 2015. we attach the "safeguarded benefits - confirmation of advice" form for your financial adviser to complete. We can't go ahead with the transfer until we receive this completed form from your financial adviser."

Linton

No one in the chain will want to risk major claims for compensation. The role of the IFA is to provide someone to take the responsibility should customers discover in many years time that they made the wrong decision.

jamesd

Amolad wrote: »

Following that comes the regulatory risk management decisions of the receiving schemes. This causes some to refuse to accept a legal transfer against advice to reduce their risk exposure.


To clarify, it is the original pension fund provider, Aegon, that is applying the regulation

Aegon is required by the law to do that before allowing a transfer.

Once Aegon has complied with the requirement imposed on it the receiving scheme decision on which transfers to accept will become relevant.

dunstonh

Would indicate to me that an IFA does not need to carry out "Full Advice" but simply ensure the customer knows what he/she are doing. It is my belief that many IFAs want to impose their rather more expensive services on the back of this transfer regulation.

Full advice is not a requirement. However, many firms are only interested in a full advice service or their own internal compliance insists on it (or their liability insurers do). Limited advice is fine but it still has to be full in the area of retirement provision.

atush

Amolad wrote: »

Crikey the overseers wouldn't let me quote Mr Bumble! the exclamation marks were originally typed as the last 3 letters of compass of course.

Swearing isn't allowed, by you or Mr Dickens. Period