Mandatory Financial Advise

dunstonh

Pity there's not a 'scale' of charges,rather than a percentage, starting FROM the £30,000 threshold, though I guess they might say that it takes as much work to sort out a pension worth £30,000 as it does to sort out one worth £100,000!

It does. A DB transfer is just about the highest risk transaction an adviser can do. Firms are being fined, shut of the market, deauthorised or fully pulling out of DB advice all over the place at the moment. It is an FCA hot potato.

Statistically, 4 out of 5 cases are best not transferred historically. Some may think it is less than that now but the FOS and FCA still have a very high bar on what they consider suitable. Certainly much higher than what we often see on these forums.

What would you charge for a transaction that has at least a £5000 excess on a complaint, statistically likely to be considered missold unless proven otherwise and could potentially get you deauthorised and lose you career, even if you think you have done the right thing?

colnotlob

Thank you for all your responses to date, to reply to some of the points:
1) No it is not the CETV, I am waiting for that, it is based on the LTA input up to finish at the moment. I am assuming at this point in time it will be over 30k.

2) I don't want their advice I know what we want to do with it.
3) I can do the transfer myself I don't need their help
4) The law says I have to get a PTS to advise if over 30K no one is interested for less than 100K
5) Basically I just want a letter saying I have taken Financial advice, it can tell me not to do it if that's what the FA thinks.

dunstonh

2) I don't want their advice I know what we want to do with it.

That makes you even higher risk.

The problem is that say in 10 years time, it turns out that virtually everyone should have remained in their DB schemes. Suddenly you will have a change of mind on this and present a complaint that blames the adviser.

This is not far fetched. This is exactly what happened last time around.

5) Basically I just want a letter saying I have taken Financial advice, it can tell me not to do it if that's what the FA thinks.

Have you checked your pension provider will accept a transfer if the advice is negative to transfer? A lot will not.

colnotlob

When I find a PTS willing to give Financial advice on a pot of less than 100k than I can have a further discussion on this point with them. The main issue I have is finding one. The few I have spoken with have said that my plan, in my set of circumstances, makes sense, but don't deal with transfers of less than 100k and have said it's very unlikely I will find one that was why I started the post to see if anyone had similar issues.

hyubh

colnotlob wrote: »

1) No it is not the CETV, I am waiting for that, it is based on the LTA input up to finish at the moment. I am assuming at this point in time it will be over 30k.

2) I don't want their advice I know what we want to do with it.
3) I can do the transfer myself I don't need their help
4) The law says I have to get a PTS to advise if over 30K no one is interested for less than 100K
5) Basically I just want a letter saying I have taken Financial advice, it can tell me not to do it if that's what the FA thinks.

Hopefully you're not going to railroad your wife into doing something with her pension that this thread has shown you don't fully understand...

That said, the government has just announced a change to the discount rate used for determining employer rates in the unfunded public sector schemes. While in general this isn't relevant to the LGPS, LGPS CETVs are presently based on it, so at some point in the not too distant future LGPS CETVs will very likely increase a bit.

colnotlob

"Hopefully you're not going to railroad your wife into doing something with her pension that this thread has shown you don't fully understand..." am I missing something here? I fully understand about transfer values and how it works, I am trying to plan in advance before the CETV figures arrives.

Silvertabby

“ 1) No it is not the CETV, I am waiting for that, it is based on the LTA input up to finish at the moment. I am assuming at this point in time it will be over 30k.

Originally posted by colnotlob

Notional value for LTA purposes is a bog standard 20 x annual pension plus 1x any automatic lump sum.

A CETV, however, is based not only on GAD transfer factors but also age, service, marital status, NRA (which differs for pre and post 2008 service and again for pre and post 2014 service), GMP (if applicable), any R85 protections, etc.

CETVs are usually such a poor return when compared with the pension that is being given up that I'm amazed that people do go ahead with the transfers. But they do.

AnotherJoe

colnotlob wrote: »

Thank you for all your responses to date, to reply to some of the points:
1) No it is not the CETV, I am waiting for that, it is based on the LTA input up to finish at the moment. I am assuming at this point in time it will be over 30k..

Please report back. I'm going to guess its around £18k. Would you still be up for it at that figure?

colnotlob wrote: »

T
5) Basically I just want a letter saying I have taken Financial advice, it can tell me not to do it if that's what the FA thinks.

The problem is, even if the advice says "dont do it" the Alice in Wonderland world we now live in means the adviser can still potentially have to pay compensation. So the charge is primarily for the compensation insurance not the work.

colnotlob

If it came back at that figure I would seriously have to revisit the plan,
there are other potential options. To be honest what I am really interested in is whether there are actual PTS's who give advice on transfer pots of less than 50k for a reasonable fee and the impression I'm getting is no. I'm not saying it's their fault, they have to make a living, it looks like a major flaw in the system.