Portafina

Malthusian

Portal_Financial wrote: »

and that most of our clients do not need or ask for a holistic wealth management or planning service. They simply want a better performing pension or for access to their pension income.

Which is why you recommend they

plough £60,000 of his pension assets into Hypa Raithwaite LP Fund, which makes loans to a Yorkshire property developer, £24,000 into Venture Oil Investment, and £18,000 split between Kudos Asia, a leisure resort in Thailand, and EOS Solar, a solar energy scheme in Cyprus.

http://www.heraldscotland.com/business/14385391.Ombudsman_upholds_pension_transfer_complaint/

Silvertabby

I'm a retired LGPS administrator - and I certainly don't miss the pain-in-the-bum telephone conversations with Portal 'advisors'.

They clearly don't know anything about pensions - they just have a script to read from - and don't have the common sense to see when the 'script' doesn't apply.

My colleagues and I had a running competion to see who had the daftest conversation - I think I was in the lead when I retired with this one:

Portal numpty: Hello - I'm ringing to chase the transfer value for Mrs X. We asked for it over a week ago and we have a duty of care to ensure that we give our clients the information they need as speedily as possible.

Me: The LGPS is a public sector defined benefit scheme. If Mrs X wishes to transfer to another pension fund, then she would initially have to opt out of the LGPS thereby foregoing her employer's 18% contributions plus other scheme benefits. Moreover, Mrs X joined the LGPS less than 6 months ago and works as a dinner lady for just 10 hours per week. I assume that you won't want the transfer value as it will be minimal, however, I can send you copies of the scheme literature.

Portal: No - we must have the transfer value as we have a duty of care to our client to see if this money can be invested elsewhere for a better return.

Me: Gah!

coyrls

Silvertabby wrote: »

They clearly don't know anything about pensions - they just have a script to read from - and don't have the common sense to see when the 'script' doesn't apply.

Some might call it a business model.

Portal_Financial

@silvertabby

Please remember that the “Portal numpty”, as you so delightfully refer to them, is in fact a person trying their best to do their job. And no, the people who chase up recalcitrant providers are not advisers. They are normally early on in their careers and learning the ropes whilst doing a role that shouldn’t exist, were it not for many providers’ “couldn’t give a damn” attitude towards their own clients and members.

Let me put what you have described in a different context: Your LGPS have ignored a clear written instruction provided on behalf of one of their members, with the correct permissions, and to the letter of the regulations. When followed up to see what is happening and to try and get the information on behalf of the member in a reasonable timescale you fob off the request because you don’t want to go to the effort of producing a simple transfer value, and then you have a laugh about it later. Meanwhile the member has to wait and wait and wait. If said client actually needs to access some money from the scheme under the pension freedoms for something urgent (say they are at risk of losing their home if they cannot clear their mortgage) then this wait causes them enormous stress. Well done you.

And in the example you give, yes the member could have previously opted out and back in again, and yes we see this regularly. It pays not to make assumptions. LGPS schemes tend to be the worst of all providers when it comes to causing delays for people that need help.

jamesd

Portal Financial, thanks for the interesting responses. I recommend that you review the handling of recent events by the CEO of United, particularly the initial responses.

I'll summarise a little to make the pattern more apparent:

1. An LGPS administrator being told by a Portal employee that a transfer value was needed to see whether the transfer value for a dinner lady on ten hours a week with six months employment could be invested better elsewhere. You replying that there might be urgent need to save the person's home, contradicting the purpose assertion in the call and not very credible anyway based on the likely transfer value.

2.FOS complaint DRN1889690: a person with learning difficulties, unable to read or write and with several medical conditions that would be expected to impair ability to continue to work was in a defined benefit pension with ill health retirement benefits that were likely to be applicable to her because of her health. She was interested in taking tax free lump sums but did not wish to transfer out to do so, a correct view based on the importance in her situation of the ill health retirement benefit. Less than two years after the transfer her firm concluded that she would be unable to work again. Had she not had the transfer done she would have been entitled to an ill health pension. Your firm processed a transfer out on insistent client basis against her clear and appropriate for her initial instruction. The FOS opined that your firm should not have carried out the transfer. I'm puzzled, though, because there seems to be no mention of the money possibly being used to purchase an enhanced annuity that her health would potentially make a better option than the work scheme. Did your firm consider the use of an enhanced annuity in this case, either alone or in conjunction with investing the income in pension contributions to obtain more tax relief until the income was needed?

3. FOS complaint DRN4838646. An individual on means tested benefits. Form completed by Portal says money was needed to start a business, customer says business was already running and didn't need more money, a troubling inconsistency. FOS observed that "the adviser" assessed her risk tolerance as moderately adventurous, correctly placing responsibility on the adviser to get it right, while Portal appeared to assert that it would be wrong for the adviser to interpret the results, which contained glaringly inconsistent answers to the various risk questions that should have prompted investigation in the view of the FOS. The client took maximum permitted income until the mere five percent of money not placed in fixed term UCIS investments was exhausted, then wanted to change investments, which wasn't permitted due to the fixed term. This doesn't appear to be very consistent with your description of only some of the investments being fixed term and given that the advice happened in 2010 the pension freedoms don't appear to be material. At best it seems that the income intent of the client wasn't well considered in the selection of which investments to recommend, given that the income had to stop after only a few months.

None of this appears to show good and sensible use of the information that was available to Portal. Not the cases and not your own replies here. Perhaps you might consider reviewing those decisions and seeing whether you really do think that your responses here are appropriate for the apparent events?

jamesd

Beyond that, I'm always interested in possibly useful providers, particularly for those with small pots. Could you tell me approximately how often in the last year clients have been advised to fund state pension deferral with drawdown money in preference to buying a lifetime annuity?

Portal_Financial

@jamesd

First of all, let me say that I take on board your comments and also appreciate the balanced tone of your posting.

When responding to posts on this forum I try very hard to strike the right technical balance, bearing in mind the wide range of readership (and comments) from those with little or no financial background to fully fledged chartered financial planners. And making sure no data protection or privacy rights or forum rules are being breached. I am also sure that different people will read different tones into how I am writing, no matter how balanced I am trying to be (and I will admit to some irritation having crept in to my last posting). I will try harder in the future though.

This thread is starting to get quite technical so I will just cover off your three items briefly, and continue to keep it all as jargon free as I can.

Your item 1. I do not believe there is any contradiction here. Many of our clients (more than half in fact) come to us with multiple pension schemes. If they are looking to use the tax free cash element of their pensions to solve a financial problem then they will want to know the maximum amount that they could access. This does not presume they will be advised to do so, but first you must ascertain the facts, and that means getting accurate figures from all schemes.

Your item 2. I don’t think it is appropriate for us to get into the specific details of the client’s factfind outcomes as this would be covered by the data protection and privacy regulations. I can confirm that, as you and the ombudsman noted, we advised the person not to transfer. The insistent client rules are in place to enable a client to insist that it is their money and that this is what they want to do. The FCA requires that you do not restrict these options where vulnerable clients are concerned. Clearly we had a duty of care to make it clear to the client what the implications of their actions would be. We believed we had done this and the ombudsman believes that we hadn’t.

We had identified the client as a “vulnerable client” and had taken the additional care we believed was needed in order to be sure that they understood exactly what they would be doing, that this was against our advice, and what they would be giving up by doing this. We have records of all of this, including a number of very lucid call recordings of the conversations with the client (and with their manager), which we still believe back up our decision making and the level of care that we provided.

This particular case did in fact highlight to us some of the ways in which the ombudsman interpret the FCA regulations in place, and led to additional procedures in our vulnerable client process to ensure that we can continue to provide advice to vulnerable clients, as the FCA expects us to do, without taking on undue risk ourselves, or indeed disadvantaging vulnerable clients in any way. And yes, annuities (including enhanced annuities) were covered at the advice stage. Our advice was not to transfer.

Your item 3. The pension freedoms are a term that most people now understand and hence it is easy to use on a non-technical forum. I apologise if it caused any confusion among the more expert readers. In 2010 this would have been taking the 25% tax free cash element of their pension from the age of 55, without the need to retire or take an additional income at that point.

The person in question stated to us (amongst other things in a wider factfind of course) that they were looking to start a restaurant business and that this money was for that purpose. When they approached the ombudsman they stated something different. Again, we have full records of this and for a long time now have recorded every phone conversation we have with a client to ensure that any misunderstandings or differences can be quickly cleared up.

I have to be honest, though, and say that having looked into this case myself and the ombudsman’s comments, I personally think we could have done a better job here. As with all companies our procedures and checks have evolved over the years with experience. The lady in question was, of course, put back into the financial position she would have been in prior to the advice, as per the ombudsman’s instructions and in line with her wishes.


With the question you asked on your second post, I’m pretty sure I have understood what you are asking but it could be interpreted in a couple of ways. If you want to private mail me a more detailed version I can pick that up with you offline.

missile

Portal_Financial wrote: »

...
@missile

I am sorry to hear you are still waiting for you review to be completed. Obviously I don’t have your full details (and would not share them on a public forum if I did) but I imagine we are still waiting for your provider to give us the information we need to complete the technical analysis of your current provision, prior to our carrying out a full factfind with you.

....

We have now had our telephone appointment and more confused than ever.
There are significant differences in the figues provided by the current pension provider and those provided by Portafina. The advisor had to go and ask her colleagues and still could not explain why. We asked for an e mail but nothing has been forthcoming.
We shall PM you with the details in the hope you can expedite a response.

davieg11

With the insistent client route Portafina are transferring active DB pensions to DC pensions for a 10% fee.

jamesd

That's perhaps three times the fee that might be obtained elsewhere, depending on the amount involved and where you are. I'm not sure that there's any case where advice is required that I would describe that as a good deal. Once values reach the £100,000 level it's thoroughly into what I'd normally be thinking of as rip-off territory, exploiting the ignorant to charge £10,000 when £3,000 is more like it.

If the fee only applies if you use their service to do the transfer, you can get the advice then transfer yourself. The standard legal requirement is that you must get advice, not follow it, and in neither case do you have to use the adviser who provided the advice to do any of the actual transferring work.

In the other hand, if it's just one DB pension with a few thousand in transfer value and lots of DC money it's not at all bad for someone who values the service aspect.

Shop around, prices vary a lot.