Restriced advice for pension transfer?

Simple_Man

Something (well many things tbh) confuses me in my pension transfer journey. There are several prominent firms in this line of work who turn out to be Restricted not Independent advisors. From what I can make out this includes Grove Pension Solutions, Saga/Tilney and Hargreaves Lansdown.

My reading of the transfer release forms I've been sent by my providers is that these firms could not therefore 'sign off' a transfer since they wouldn't have been able to provide me with 'independent' advice. Of course that depends on how far you take the definition of the word.

If so, that then slightly begs the question what the point of these websites is, since they appear targetted at people just like me...

LHW99

Are you talking about a DB or a DC transfer?
If its is DB then there are specific requirements for an adviser to have to be able to legally give advice.
DC transfers can be done without any advice at all if you wish, unless there are specific things like guaranteed rates attached.

Malthusian

It needs to be independent of the scheme. The distinction between independent/restricted advice is a different kind of "independent". Restricted advice is fine as far as the legal requirement to take advice for defined benefits and safeguarded rights over £30,000 goes.

However in most circumstances you should obtain independent financial advice. The cost is typically no higher than restricted and the advice better quality. Restricted advice is not necessarily bad, but it is less likely to be the best.

dunstonh

There are several prominent firms in this line of work who turn out to be Restricted not Independent advisors. From what I can make out this includes Grove Pension Solutions, Saga/Tilney and Hargreaves Lansdown.

Nowadays, salesforces are more likely to be restricted. This is because the FCA has been hot on making sure large companies have sufficient systems and controls in place to ensure that all their advisers or sales reps work the same way. That effectively means they have to cater for the lowest common denominator. There is also the issue of liability. Some very large advice firms have been forced to close because of the actions of a small number of advisers/reps. It is extremely hard to be a large firm and be independent and to have satisfactory controls. Going restricted avoids a lot of the issues.

So, nowadays, it generally the smaller firms that are IFAs as they can control their own risks on a local basis rather than national.

If so, that then slightly begs the question what the point of these websites is, since they appear targetted at people just like me...

As mentioned above, the forms can be signed by restricted FAs, sales reps or IFAs. They are all independent of the scheme. It doesnt mean it has to be an IFA.

However, restricted FAs and salesforces are typically expensive and the limitations could impact on the quality of advice. So, it makes sense to use an IFA.

Simple_Man

Thanks for the replies, I was hoping it reads as 'independent of the scheme'. However one odd thing is that just now I've got an email from Saga which states that their agents only recommend Tilney products and I have to specifically go to an IFA first. I was rummaging around with the search here earlier and I know someone mentioned going to Tilney - I got the impression they had acted as the advisor too. Does this mean that there is a third category 'tied' or is tied the same as restricted?

Simple_Man

LHW99 wrote: »

Are you talking about a DB or a DC transfer?
If its is DB then there are specific requirements for an adviser to have to be able to legally give advice.
DC transfers can be done without any advice at all if you wish, unless there are specific things like guaranteed rates attached.

One of each with a GAR on the DC so yes needed on both.

Malthusian

Simple_Man wrote: »

Thanks for the replies, I was hoping it reads as 'independent of the scheme'. However one odd thing is that just now I've got an email from Saga which states that their agents only recommend Tilney products and I have to specifically go to an IFA first. I was rummaging around with the search here earlier and I know someone mentioned going to Tilney - I got the impression they had acted as the advisor too. Does this mean that there is a third category 'tied' or is tied the same as restricted?

Tied is now the same as restricted. You used to have "tied" "multi-tied" and "independent". "Tied" and "multi-tied" then became "restricted".

Why not just get some quotes from local IFAs?

xylophone

You have a DC pension with GAR and DB pension valued at over30,000.

http://www.fsa.gov.uk/smallfirms/resources/factsheets/pdfs/pension_transfers.pdf

You need advice from a Pension Transfer Specialist.

https://www.moneyadviceservice.org.uk/en/articles/transferring-out-of-a-defined-benefit-pension-scheme

The Money Advice Service has a retirement adviser directory you can use to draw up a shortlist.

All the advisers and firms on the directory are regulated and will also show whether they have advisers who are qualified to deal with transfers from DB schemes.

We suggest you contact at least three firms to find one that suits your needs.

The Directory splits out firms that will see you face to face and those that deal only by telephone or online.

dunstonh

However one odd thing is that just now I've got an email from Saga which states that their agents only recommend Tilney products and I have to specifically go to an IFA first.

That is an example of a really heavy restriction. And one that is almost certainly going to result in outcomes that are not "best advice".

Single tied is the worst of the restricted adviser levels.

If a firm introduces any form of restriction, whether it be extremely minor or extremely restrictive, they automatically become restricted advisers.

Simple_Man

Malthusian wrote: »

Tied is now the same as restricted. You used to have "tied" "multi-tied" and "independent". "Tied" and "multi-tied" then became "restricted".

Why not just get some quotes from local IFAs?

I've been trying both approaches (local and remote/internet based) but the local route isn't bearing fruit so far eg one does DC but not DB, one was doing DB but has suspended it and isn't sure if and when they will resume, one chatted on the phone and said they would send me their Fact Find and SLA but didn't, seems to have got cold feet for some reason (or force majeure has intervened). Several never replied to my emails or replied with one liners then disappeared when I replied. Also I looked at some local people in one of the directories which shows how many transfers they've actually done (VouchedFor perhaps?) and some of the nearby ones have quite limited experience which put me off a bit.

dunstonh

I've been trying both approaches (local and remote/internet based) but the local route isn't bearing fruit so far eg one does DC but not DB, one was doing DB but has suspended it and isn't sure if and when they will resume, one chatted on the phone and said they would send me their Fact Find and SLA but didn't, seems to have got cold feet for some reason (or force majeure has intervened)

About 1 in 10 advisers hold the regulatory permissions to do DB transfers. For it to be cost viable (in normal times, rather than current) the firm really needs to be doing enough of them to make it worthwhile. So, rural firms are less likely to do it then city firms. Smaller firms less likely than larger firms.

Also I looked at some local people in one of the directories which shows how many transfers they've actually done (VouchedFor perhaps?) and some of the nearby ones have quite limited experience which put me off a bit.

Vouchedfor is rubbish. However, you would expect the average adviser to only have a DB transfer very occasionally. Its a niche transaction. Historically it is the wrong transaction in 4 out of 5 cases. An adviser could go years without doing one.

I would actually be more concerned if a firm was doing loads as that would be unusual. It could suggest (as much as limited data can often lead to bad conclusions) that the firm is doing far more than it should be and they may be operating in a way that is doing them on a bulk basis rather than a personalised basis.

Try this one: https://adviserbook.co.uk/