FAs Go Ahead

Malthusian

TBC15 wrote: »

So why be an IFA with qualifications to do this sort of work if you don’t want to do this sort of work?

Wanting to do this sort of work does not mean you want to do it for everyone. Especially if they are complaints waiting to happen.

dunstonh

TBC15 wrote: »

So why be an IFA with qualifications to do this sort of work if you don’t want to do this sort of work?

Many don't want to do it and pension transfers are an area that IFAs are not required to do if they do not wish to do so.

Of those that do want to do it, it will largely be something they do on an irregular basis for clients with longer-term relationships and those typically carry less risk than someone walking in wanting a one-off transaction where they intend to pick provider and investments.

TBC15

It would appear that the new pension freedoms have a problem in that the required advice is relatively unobtainable at a sensible price with the current arrangements.

I count myself lucky that I have managed to take up the advantages.

sandsy

TBC15 wrote: »

It would appear that the new pension freedoms have a problem in that the required advice is relatively unobtainable at a sensible price with the current arrangements.

I count myself lucky that I have managed to take up the advantages.

And many other people will be fortunate and happy down the line that they accepted the advice that it was not in their best interests to transfer.

The key issue about this is that it's not the best thing for everyone. An adviser helps people to see, on an individual basis, whetheh it's likely to be the right thing for them or not, based on their personal circumstances, ability to accept risk etc.

HappyHarry

TBC15 wrote: »

It would appear that the new pension freedoms have a problem in that the required advice is relatively unobtainable at a sensible price with the current arrangements.

I count myself lucky that I have managed to take up the advantages.

The new pension freedoms were not designed with DB schemes in mind. The pension freedoms were designed to allow more freedom to those with DC pensions. The whole "risk" scenario is someone wanting to move from a highly secure long-term income to a pot of money that could be lost on a whim.

The FCA are currently consulting on changing the assumption that such transfers are wrong. There are also a new set of qualifications for pension transfer specialists being introduced, which are at a slightly lower level than the current qualification requirements. This could mean more competition, and hence lower fees, in this area.

Originally Posted by TBC15
So why be an IFA with qualifications to do this sort of work if you don’t want to do this sort of work?

Excellent question. Malthusian above gives a very good response, which covers part of the reason.

I know that there are a number of IFAs out there who are afraid of the future consequences of giving such advice. I have heard many comments from IFAs who are concerned about DB transfers being the next "PPI mis-selling scandal". The cost of errors in such cases would be enormous to small IFA practices.

I believe that if the IFA does their job thoroughly, and communicates all risks clearly to their clients wanting such DB transfers, then there would be no issues with regard to the IFA signing a declaration of advice, even if the advice is not to transfer.

Asking an IFA to assist with a DB transfer where the IFA has recommended it should not take place is probably a step too far though.

dunstonh

It would appear that the new pension freedoms have a problem in that the required advice is relatively unobtainable at a sensible price with the current arrangements.

You are mixing up two different things. Pension freedoms (2015) were for money purchase pensions. Not defined benefit pensions. The defined pension transfer requirements pre-date pension freedom options.

In the last 30 years, there has only been a window of a couple of years where defined benefit transfers are more likely to be suitable to transfer than retain. In most of that 30 year period, the ratio was around 9 out of 10 best staying where they were and not transferring. This is why the advice requirement for that exists.

There is no advice requirement for pension freedom options unless there are safeguarded benefits with the value of over £30k. And in that scenario, where you are buying an unsecured income, you would need to see a pension transfer specialist. For everyone else, advice in that area is relatively cheap.

TBC15

dunstonh wrote: »

You are mixing up two different things. Pension freedoms (2015) were for money purchase pensions. Not defined benefit pensions. The defined pension transfer requirements pre-date pension freedom options.

In the last 30 years, there has only been a window of a couple of years where defined benefit transfers are more likely to be suitable to transfer than retain. In most of that 30 year period, the ratio was around 9 out of 10 best staying where they were and not transferring. This is why the advice requirement for that exists.

There is no advice requirement for pension freedom options unless there are safeguarded benefits with the value of over £30k. And in that scenario, where you are buying an unsecured income, you would need to see a pension transfer specialist. For everyone else, advice in that area is relatively cheap.

But in the other case, as I have said before. Is it not very difficult/expensive??

thebullsback

so the short answer is no?

RickyB2000

thebullsback wrote: »

so the short answer is no?

I think the short (or technical) answer is yes, as long as you can find an advisor who will advise either way and a provider who will accept even against advice. The second post on the thread suggests the latter exist. And the former do as well. Practically however it can be difficult.

Malthusian

thebullsback wrote: »

so the short answer is no?

The short answer is yes, especially as you didn't even say that you were talking about a pension with safeguarded benefits.