DB Transfer - important question to ask your IFA

TcpnT

Apart from anything else, the TV Analysis Report shows a critical yield based on a particular scheme that is being transferred to. If that scheme changes, the critical yield will change, and that could influence the advice to transfer or not.

Is this statement correct? I thought that a TVAS report determined the future investment yield of the transferred sum necessary to produce a return that could match the benefits offered under the original DB scheme. I can't see why this should be dependent on the details of the scheme being transferred to. Am I missing something here?

Malthusian

TcpnT wrote: »

Is this statement correct? I thought that a TVAS report determined the future investment yield of the transferred sum necessary to produce a return that could match the benefits offered under the original DB scheme. I can't see why this should be dependent on the details of the scheme being transferred to.

Because the higher the charges applied by the scheme being transferred to, the higher the critical yield required.

sandsy

The legislation does not require that the advice is followed in order to receive confirmation that advice has been provided.

Nor is there anything in FCA rules to prevent advisers from charging on a contingent basis (only if the advice is followed).

So there is nothing to prevent advisers from providing confirmation that advice has been provided if they choose the charge that way.

Indeed, it could be argued that if advice has been provided and they have not provided confirmation, they are breaking the law.

Brynsam

If you've not yet heard it, download today's broadcast of Money Box on Radio 4 (and let me guess - the scheme to which you were recommended to transfer was True Potential Wealth Management...?). Should be able to get your letter confirming you have taken advice without any more fuss!

Link: https://www.bbc.co.uk/programmes/b09vwzg4 - the relevant item starts 18 minutes in.

Brynsam

dunstonh wrote: »

In this case, no risk at all. The OP is refusing to pay the fee but wants the adviser to sign the forms saying they have received advice. The ombudsman is never going to rule in favour of a consumer trying to potentially defraud the advice company. Effectively, the service ends when the consumer says they are not going to pay.

Note post #7 by the OP. "Following their advice will cost £4k which I don't want to pay as they haven't given me an investment option I'm happy with."

The thread has focused more on the content of #1 by the OP. The detail in post #7 changes the position significantly.

Listen to what Michelle Cracknell of TPAS had to say on today's edition of Money Box and think again.

Linton

Would the OP be able to find a provider willing to accept a DB transfer against IFA advice?

Brynsam

Linton wrote: »

Would the OP be able to find a provider willing to accept a DB transfer against IFA advice?

Yes; plenty who will (ditto workplace schemes which are trust-based and still prepared to accept transfers in). In any case, it sounds as if the advice here was actually in favour of a transfer - but the adviser doesn't seem to have considered the option of the workplace scheme, which is an occupational scheme and thus likely to have lower charges (or possibly no charges) than a third-party provider.

dunstonh

Brynsam wrote: »

Listen to what Michelle Cracknell of TPAS had to say on today's edition of Money Box and think again.

It is not the same scenario. The OP mentions it is an IFA. Not a product provider and sales rep which is the case Moneybox is referring to.

True Potential has a charge on entering their product. They sell their own product. They are not IFAs. Whereas an IFA has no products to sell. Their advice is what you are buying. The moneybox article makes it clear from 21:40 that the contract she signed only required her to pay if the transfer was done via them into one of their plans.

A mistake by True Potential and I bet they have reworded that now. If they havent reworded it then maybe people should take advantage of their poor wording. True Potential now have the liability of recommending a pension transfer without receiving any remuneration.

However, as IFAs don't have their own product, you would likely find this is not an issue. For example, we use a third party company for compliance support and its one of the big two covering IFA firms. We use their recommended template. It clearly words the fee agreement that the client is buying the advice. Nothing is contingent on buying a product.

So, if a firm is daft enough to set their fee on a contingency basis, then I suppose that makes them fair game.