Transferring From DB Scheme to Drawdown Who's Best?

TheRainman

I am thinking about transferring from my DB scheme after 39 years and investing through an IFA into a pension drawdown scheme primarily to front load as a DB scheme does not give this flexibility. I have met with an IFA and a restricted FA from St James Place. Has anyone any views on what providers are recommended in the market place. To be fair the guy from SJP seemed good, it seems a good product, I have read online about expensive fees (1.5% annually) any views or opinions would be appreciated.

xylophone

https://forums.moneysavingexpert.com/discussion/6027700/sjp-in-the-sunday-times

Have you checked that the IFA/FA have the necessary pension transfer qualifications?

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/pension-transfers-conversions/

SonOf

Has anyone any views on what providers are recommended in the market place.

If you use an IFA, then they will pick the provider/platform. Not you. That is their job.

You should not be using restricted FAs.

To be fair the guy from SJP seemed good, it seems a good product, I have read online about expensive fees (1.5% annually) any views or opinions would be appreciated.

Its not good. Its an old fashioned product with a very limited fund range that is very expensive. An IFA should be able to blow them out of the water every time in every area except glossy material and flash marketing. If you think SJP are good then you have been brainwashed and you really do need an IFA.

The fact you mention SJP fees at 1.5% annually suggests the SJP rep has not been honest about all the charges. That is quite a common occurrence.

Audaxer

I guess you must have been quoted a very good transfer value, as its a big decision and risk in my opinion to transfer out of a DB pension. But if I was going to do it, I certainly wouldn't use a very costly Wealth Management company. See thread on SJP linked below:
https://forums.moneysavingexpert.com/discussion/6027700/sjp-in-the-sunday-times

Aegis

Obvious vested interest, but I cannot fathom why someone would want to use a restricted adviser for something as life-changing as a DB pension transfer. SJP in particular cannot accommodate your specific requirements in retirement, as they have to drop your funds into one of their own specific products. Need something a little different? Pretty much "too bad" has to be the answer.


You'll almost certainly get a cheaper and better service by going to an IFA that has the AF3 (advanced pension planning) or its predecessor the G60 qualification. As an added advantage, if you don't like the IFA it's extremely unlikely that they will have locked your pension fund into a product with a 6% exit charge, which is standard practice for SJP.

jamesd

TheRainman wrote: »

I have met with an IFA and a restricted FA from St James Place. Has anyone any views on what providers are recommended in the market place

Start with anyone but SJP and refine from there. Renowned for costly products and nasty lock-ins.

k6chris

SJP and indeed non-independant advisors are primarily sales people, that's why they come across as hugely polished, very nice etc. What made you conclude "the guy from SJP seemed good, it seems a good product", was it what he told you or was it based on your independant research, comparing many offerings??


This is a huge decision, base it on facts not warm feelings!


Good l.uck

Marcon

TheRainman wrote: »

I am thinking about transferring from my DB scheme after 39 years and investing through an IFA into a pension drawdown scheme primarily to front load as a DB scheme does not give this flexibility.

Have you thought about taking maximum tax free cash from your DB scheme and investing (or spending!) that, which might have the same effect, depending on why you want to 'front load'?

cfw1994

TheRainman wrote: »

I am thinking about transferring from my DB scheme after 39 years and investing through an IFA into a pension drawdown scheme primarily to front load as a DB scheme does not give this flexibility. I have met with an IFA and a restricted FA from St James Place. Has anyone any views on what providers are recommended in the market place. To be fair the guy from SJP seemed good, it seems a good product, I have read online about expensive fees (1.5% annually) any views or opinions would be appreciated.

Curious that the only “likes” of the eminently wise replies from smart people are other users, not OP (TheRainman)......I hope you are reading and absorbing nonetheless!

Your reason is “primarily to front load as a DB scheme does not give this flexibility”.
What do you mean by this? You want to withdraw more in earlier years of retirement? Does that run the risk of emptying your pot faster?

In the majority of cases (not all - reduced life expectancy might be a good reason to switch), DB schemes are more beneficial for most people than DC ones.

Beware the glossy claims and smooth sales people.....& as has been mentioned above, with SJP, the expensive fees and AWFUL lock-in transfer-out costs!

tacpot12

Transfering froma good DB scheme which you have been a member of for 39 years is unlikely to be a wise financial move. Even if you have to accept an actuarial reduction for starting to draw benefits before the normal retirement age, you are still likely to be better off. Only if you have a very short life expectancy would it make any sort of financial sense to transfer to private pension and then draw it down.

However you can take professional advice on whether to transfer, and if the advice is not to transfer, you can ignore it. This makes you an "insistant client" and not many pension companies accept transfer from insistent clients.

Aegis

tacpot12 wrote: »

Transfering froma good DB scheme which you have been a member of for 39 years is unlikely to be a wise financial move. Even if you have to accept an actuarial reduction for starting to draw benefits before the normal retirement age, you are still likely to be better off. Only if you have a very short life expectancy would it make any sort of financial sense to transfer to private pension and then draw it down.

However you can take professional advice on whether to transfer, and if the advice is not to transfer, you can ignore it. This makes you an "insistant client" and not many pension companies accept transfer from insistent clients.

While this is fine as a generality, individual cases often make sense even with normal life expectancy, depending on specific goals of the client and the transfer value offered (easiest to think of this in terms of a multiple of income).


I've seen a number of cases this year where the transfer looked very much in the client's interest, and I have yet to advise someone in this parfticular field where they have severely limited life expectancy.