Aviva say FA advice needed before transferring £3,000 SIPP

SabNys

A young relative has a SIPP pot of £3,000 from Aviva. This was a standard part of the compensation package for Apple temporary tech advisers. The last employment was a few years ago.

The relative now wants to transfer (AKA: I want them to transfer) the SIPP to a no-brainer Vanguard Target Retirement with a cheapie broker such as BestInvest.

Aviva says my relative needs to seek financial advice, for which there will be a fee.

I would be grateful is someone could advise whether Aviva's stipulations are legal.

The following 2015 link suggests that Aviva tried to break laws relating to ACCESS, whereas I'm looking for advice re TRANSFER:

https://www.theguardian.com/money/2015/jun/03/how-can-we-be-forced-to-take-financial-advice-we-dont-need

Here's an Aviva link that says if SIPP is "of a certain size", you need an FA. There's no mention of the size.

https://www.aviva.co.uk/corporate/workplace-benefits/expert-insight/pension-transfers/

Thanks.

HappyHarry

There is no legal reason why a SIPP with £3,000 in it would need to take regulated advice to transfer it elsewhere.

When did Aviva tell your relative this? Have they justified this requirement at all.

The normal procedure would be for your relative to open a SIPP with a new provider, and ask them to contact Aviva to transfer the Aviva SIPP. Has this happened, or has your relative approached Aviva and asked them to arrange a transfer?

n.b. Investing in the Vanguard retirement account with BestInvest isn't a "no-brainer". It's just a different investment strategy to the one your relative is currently in.

Brynsam

SabNys wrote: »

The relative now wants to transfer (AKA: I want them to transfer) the SIPP to a no-brainer Vanguard Target Retirement with a cheapie broker such as BestInvest.

You don't sound qualified (in any sense of the word) to be giving any sort of financial advice. Maybe let your young relative take their own decisions - what you are suggesting certainly isn't a 'no brainer' (a phrase which usually ends in tears when it comes to financial products...).

SabNys

HappyHarry wrote: »

When did Aviva tell your relative this?

Shortly before 8 Sep 2018.

Have they justified this requirement at all?

No. It was a flat statement: No FA - no transfer.

...has your relative approached Aviva and asked them to arrange a transfer?

They approached Aviva to open negotiations about a transfer, and get info regarding what she needed to do to achieve that objective.

BTW: I hope I'm not hijacking my own thread. If someone says this needs a new post - I can do that. I contacted the target broker, probably BestInvest, to discuss the transfer. They said the SIPP value was a bit small for them to accept (maybe £500 short - the discussion was a year ago). So, my relative planned to add whatever was needed to the current SIPP to bring the value up to BI's minimum level.

Is this addition likely to cause problems? Almost like "Extending the Aviva contract 'by implication' rather than by agreement on both sides." I'm now aware that Aviva are known in the public domain as shady dealers, so I want to be prepared in advance.

Thanks.

HappyHarry

Of course you're not hijacking your own thread!

If what you have said is accurate, then Aviva have made an error. That happens with any provider from time to time.

Aviva are certainly not "shady dealers". They are a well respected FTSE 100 company with many, many billions of funds under management.

However, over the past year or so they have struggled with their customer service, possibly due to the acquisition of a large business (Friends Life) and their failing to merge their respective client services departments very well.

With all due respect, I feel that Brynsam's comments above may be correct. You don't seem to know what you are doing, you seem to believe inaccurate things about the existing provider, and you are referring to cheap strategies as "no-brainers". Would it not be best to let your relative make her own decisions?

Linton

If your relative wants to transfer they should follow HappyHarry's advice and get the receiving scheme to organise a transfer-in. It is the same process as with ISAs, you do not contact the current pension holder, it could well confuse matters.



I also agree with Brynsam's doubts.


In my view moving from Aviva to BestInvest is not a no-brainer. BestInvest are not a "cheapie broker". They are mid-price and from their advertising seem to me to be going for wealthier more experienced investors. Using an Aviva in-house fund could be cheaper. Moving a young pension investor into a Vanguard Target Retirement fund is pointless at best since they are presumably a long way from retirement and if they were near retirement a Target fund is inappropriate should they be intending to use drawdown as most people currently are.


Finally, Aviva are a major professionally run financial company with millions of customers looking after £Billions. They are not "shady dealers".

AnotherJoe

Vanguard target Retirement certainly isn't a no brainer but a product brought out just as it became redundant and as said, for a young person it's pointless

xylophone

Vanguard are planning to offer a SIPP later this year.

https://www.vanguardinvestor.co.uk/need-help/answer/do-you-offer-a-pension-or-a-sipp

Your relative should contact Aviva in writing asking why they believe that she needs advice to transfer to another provider.

dunstonh

The relative now wants to transfer (AKA: I want them to transfer) the SIPP to a no-brainer Vanguard Target Retirement with a cheapie broker such as BestInvest.

Not really a no brainer as the Vanguard Target retirement funds are a niche option that is not suitable for most people.

Aviva says my relative needs to seek financial advice, for which there will be a fee.

You say it is an Aviva SIPP. Is this the Aviva platform or was it originally another company name?

This was a standard part of the compensation package for Apple temporary tech advisers. The last employment was a few years ago.

Using a SIPP for that was a very strange decision. Are you sure it is a SIPP with Aviva and not a personal pension or a section 32 buyout bond or hybrid scheme?

And by the way, the Aviva SIPP has access to the Vanguard funds.

Pricing for deals arranged via big employers tends to see the receiving plan set up cheaper than the normal retail charge. So, you could actually be increasing the charges doing what you propose.

I'm now aware that Aviva are known in the public domain as shady dealers

Anyone that considers Aviva to be shady dealers doesnt know what they are talking about. They have issues. Especially on legacy business and other insurers they have bought over the years. However, nothing that can be considered close to shady.

LHW99

Could be the person at Aviva misread £3000 for £30000 - for which advice could be required if there were any guarantees.

SabNys

LHW99 wrote: »

Could be the person at Aviva misread £3000 for £30000 - for which advice could be required if there were any guarantees.

Good point

But I asked my relative to check. Definitely £3,000 (which is less than what BestInvest will accept for a transfer).

Thanks.