Advice please. Firms for Final Salary Transfer £330k

iro

Fair enough, no issues with that.

To have the qualifications and not use them FOR marketing is one thing, but to not have the qualifications and be on a list of IFAs offering pension transfers is ridiculous.

Phone up 'do you do pension transfers'

'can we take your details and phone you back?'

'do you deal with DB transfers?'

'we have someone we can use'

'do you deal with DB transfers in house?'

'Well, no not exactly'

'Goodbye!'

Next phone call and on and on!

A simple statement:

THIS IFA DOES NOT HAVE THE NECESSARY PERMISSIONS TO DEAL WITH TRANSFERS FROM DEFINED BENEFIT SCHEMES'

Across the top of their marketing material (across the top of the website as well) would suffice!

I shall be writing to the FCA.

redux

leicestersq wrote: »

Now you have changed your mind.

As John Maynard Keynes once said, "when the facts change I change my mind".

My pension scheme has closed to new accruals. The company has also stated that the pension will no longer increase in line with any salary increase I receive. This is crucial to my decision. If my pay was increasing and my pension was increasing inline with that, then I would be happy to remain in the DB pension scheme I am in. I would have a pretty good inflation proofing.

But my DB pension scheme isnt going to increase with my pay level. I will get a mix of RPI/CPI (depending on when the accrual was made) up to a max of 5%. There is no way the guarantors of the scheme are going to agree to more than 5%.

Before that change, I felt I had a full suit of armour, I was protected against inflation, and bad investing by the fund managers. I could guarantee a good pension, it was unbeatable.

After that change, I am now at huge risk. A bout of inflation will wreck my pension scheme, hence why I want to change quickly. I am frustrated that there is no easy route to allow me to take responsibility and do this.

I am not a financial adviser, so treat this comment as possibly naive.

In that position yes inflation would be a worry, but would exporting from the scheme necessarily be any improvement? If they can't underwrite guarantees where you are, to what extent can anyone else, and if so does this add extra cost, or park some of the funds in investments that may underperform if low inflation?

It might be that staying there and opening something else alongside would be one approach.

Or saying tough, I'm going to have to bear some inflation risk myself, and therefore step up the level of contributions somewhere or other, maybe in SIPP, maybe also ISA or other investments outside..

I assume a consultation might work around some of these points, and more besides.

dunstonh

To have the qualifications and not use them FOR marketing is one thing, but to not have the qualifications and be on a list of IFAs offering pension transfers is ridiculous.

You need to take that up with the directory in question. This is largely as most fail to differentiate pension types.

A simple statement:

THIS IFA DOES NOT HAVE THE NECESSARY PERMISSIONS TO DEAL WITH TRANSFERS FROM DEFINED BENEFIT SCHEMES'

Across the top of their marketing material (across the top of the website as well) would suffice!

I shall be writing to the FCA.

The current rules do not require the IFA to hold the permissions. As long as the advice is checked and signed off by someone that does. So, that simple statement would not reflect the regulatory position and it would not be true as they could facilitate that transaction.
Butchering your website, if you have one, to cater for the 1 in 500 that may be looking is not something any sensible person would do.

iro

The current rules need changing, it needs to be clear to the consumer, opaqueness is hunky dory for the IFA but bad for the consumer!

I will be writing to the FCA!

leicestersq

redux wrote: »

I am not a financial adviser, so treat this comment as possibly naive.

In that position yes inflation would be a worry, but would exporting from the scheme necessarily be any improvement? If they can't underwrite guarantees where you are, to what extent can anyone else, and if so does this add extra cost, or park some of the funds in investments that may underperform if low inflation?

It might be that staying there and opening something else alongside would be one approach.

Or saying tough, I'm going to have to bear some inflation risk myself, and therefore step up the level of contributions somewhere or other, maybe in SIPP, maybe also ISA or other investments outside..

I assume a consultation might work around some of these points, and more besides.

Exporting my scheme would be a massive improvement. I would be free to invest in stocks and shares, which are the best defence against inflation because it is those companies that would be raising their prices causing the inflation.

Yes, there are risks of course, I might choose a bunch of lemons for my portfolio. But I discount this as a major risk because I would be choosing stocks and shares of big companies, the same ones in defined benefit pension schemes up and down the nation, and the same ones supporting pension schemes up and down the country. If they were all to fail, then not only would the schemes that contain them sag and perhaps fail, but in turn those failing schemes can cause the sponsoring companies to fail, think BHS. Also, the pension schemes of the companies of my lemon shares would be swept up into the PPF, and they would be of such size that the PPF may no longer be able to keep up its guarantees.

So if my portfolio were to fail, then I would be in good company because we would see large failures elsewhere and we would all be in trouble.

iro

Nothing will ever be the same after the TATA changes.

leicestersq

dunstonh wrote: »

You need to take that up with the directory in question. This is largely as most fail to differentiate pension types.



The current rules do not require the IFA to hold the permissions. As long as the advice is checked and signed off by someone that does. So, that simple statement would not reflect the regulatory position and it would not be true as they could facilitate that transaction.
Butchering your website, if you have one, to cater for the 1 in 500 that may be looking is not something any sensible person would do.

iro wrote: »

The current rules need changing, it needs to be clear to the consumer, opaqueness is hunky dory for the IFA but bad for the consumer!

I will be writing to the FCA!

There appears to be an impasse between pension savers and IFA's. I think writing to our MPs and the FCA is a good place to start, because it is them that have caused this impasse.

To move our pensions we have no choice but to go to a financial advisor.

They dont want to help us do what we want to do, because they are set up to help people who dont know what to do. Execution only requests are not what they are expecting. Worse, they feel that by having to give advice that isnt wanted, they are going to be on the hook for something should it all go badly wrong.

And back to the plebs, we have to have our finances subject to models that are bound to be incomplete, and are almost certainly irrelevant. We dont want to put financial advisors on the hook for their advice, we just want a cheap execution cost and the right to bear the risk ourselves.

The FCA and the government dont want to let us bear the risk and make the choices because they fear that too many of us will cry when it goes south, as it is bound to for a number of us. I sort of see the problem from their point of view as well.

It looks to me like the only way out is for us individuals to have a financial advice opt out if we choose. Let us sign something, let the FCA keep a copy forever. Then let us take that and allow us to execute our own transactions, safe in the knowledge that the losses that follow are all ours to bear.

redux

leicestersq wrote: »

Exporting my scheme would be a massive improvement. I would be free to invest in stocks and shares, which are the best defence against inflation because it is those companies that would be raising their prices causing the inflation.

Yes, there are risks of course, I might choose a bunch of lemons for my portfolio. But I discount this as a major risk because I would be choosing stocks and shares of big companies, the same ones in defined benefit pension schemes up and down the nation, and the same ones supporting pension schemes up and down the country. If they were all to fail, then not only would the schemes that contain them sag and perhaps fail, but in turn those failing schemes can cause the sponsoring companies to fail, think BHS. Also, the pension schemes of the companies of my lemon shares would be swept up into the PPF, and they would be of such size that the PPF may no longer be able to keep up its guarantees.

So if my portfolio were to fail, then I would be in good company because we would see large failures elsewhere and we would all be in trouble.

A highly simplified version of this is that you might be able to do better using broadly the same assets.

Why?

Where are the differences? Is the pension fund more cautious, with a higher proportion of bonds?

iro

Yes totally agree treat us like adults, instead we have death by a thousand cuts with IFA fees and the rest of the Financial sector 'blob' extracting fees.

The condescending atiitutude of some on here ranckles as if we are all incapable of making decisions about our own financial futures!

leicestersq

redux wrote: »

A highly simplified version of this is that you might be able to do better using broadly the same assets.

Why?

Where are the differences? Is the pension fund more cautious, with a higher proportion of bonds?

In my case it is inflation protection. If inflation stays very low, then I doubt I will be able to outperform my pension scheme by any measurable amount.

If inflation is high, then I will be able to outperform it, because my return from the DB scheme is constrained at a maximum increase of 5% per annum.

If inflation were to rise rapidly, think what happens to most pension schemes. They have large volumes of fixed interest bonds. Those would fall in value and their income stream would become pitiful in real terms. Stocks and shares would perform far better, but they would only be a much smaller part of the scheme. The DB scheme would be quite well asset/liability matched, because the stocks and shares would help them raise payouts a bit, but they could never raise their payouts to keep up with a high rate of inflation because of all the bonds they hold where the payout is fixed. Lucky for the DB scheme that payout increases that they have to pay are capped at 5%.

My own self managed plan wouldnt have that cap. Yes, I lose the guarantees behind the scheme, but there aint no guarantees in this DB scheme for a high inflation world.

So what to do depends on what you think is likely to happen to inflation over the next 40 years or so. Are you confident that inflation will remain benign over that time? I look at the state's off balance sheet liabilities and I can think of only one way to deal with them.