Don't use Hargreaves Lansdown

[Deleted User]

I want to share my experience so that others make a better choice than I did.

My case has just run its course with the Financial Ombudsman, and she found in their favour. So I'm liable to pay Hargreaves' industry-leading fees. When I do, the FO will publish their final decision and I'll post a link so that others, especially those looking into transferring a defined benefits pension, avoid Hargreves Lansdown at all costs.

Anyone thinking of transferring out of a DB pension is obliged to buy financial advice. I chose Hargreaves Lansdown. They advised me to do nothing, I insisted on transferring and that's where it became difficult. Hargreaves Lansdown have a fee structure whereby they collect whether or not they make a positive recommendation. Moreover, an insistent client has to find an alternative provider.

Which I did, but then Hargreaves Lansdown wouldn't sign the other's application form, effectively thwarting the process until the deadline ran out.

Long story short, I had to start the process anew. Eventually I gained complete control of my pension and I am very content in this regard for the rest of my days except for Hargreaves Lansdown's part in the process.

Of course Hargreaves Lansdown are at the conservative end of an industry already paranoid about potential future claims and liabilities. I shouldn't have used them. Hypocritically, they still accept DB transfers at one remove. My heartfelt advice to the layman unlikely to be dying soon but considering a DB pension transfer is:

Please don't use HARGREAVES LANSDOWN.

bowlhead99

Pending the FO decision publication, I suppose what happened is:

- you wanted to transfer DB pension and needed to buy advice to do so;

- you bought the advice from HL and the advice was don't do it;

- as they didn't think you should do it, they wouldn't let you throw away the guaranteed benefits and transfer to them;

- in order to transfer to someone else, you needed to prove that you had received advice on your transfer;

Then:

- HL would not sign off to the third party to say that they had advised you on your transfer, because they believe a transfer to be against your best interest, and completing the third party's documentation would assist you to complete the transfer away from your guaranteed benefits.

- They did not want you to come back a few years later having lost all your money and unable to support yourself through a long retirement, complaining that they assisted you to transfer away from your guaranteed benefits when it was not a smart thing to do.

- They fear that in order to extract compensation from them for your own stupidity, you will say you didn't understand how valuable your DB was, and that you were only being insistent out of naivety, and any responsible professional should have stopped you in your tracks, and that you'd though that if they were happy to help you complete the transfer away from the valuable benefits by filling in the receiving scheme's paperwork, it couldn't be that bad really, so it gave you a false sense of security and seemed like tacit approval for your actions.

- As they do not want to be sued by such a customer (chasing compensation from anybody with deep pockets to bail him out of his own mistake); a person who has already been seen to not act rationally in the face of good advice - they decide not to sign your prospective receiving scheme's paperwork, as they do not want to be seen to assist you make yourself worse off.

Then:
- Due to the fact that they believe the service they sold to you was merely, "let me know if I should transfer my DB pension" rather than, "evaluate and recommend for or against a DB transfer and - regardless of outcome - also facilitate the transfer even if recommending against it by completing receiving scheme paperwork to say I've had advice and seem to comprehend it" ; they are not going to sign off the receiving scheme paperwork, because they have not sold you the service of signing off the receiving scheme paperwork.

- you don't think this is fair because you hadn't thought that they would refuse to complete an acknowledgement that they advised you on your transfer, after they advised you on your transfer. Whereas they think they gave you a recommendation report for your own use without a duty to report to third parties, and they are not interested in helping you transfer out of your DB against your best interests, and it would be 'helping you' to do that if they signed off the third party paperwork.

So they feel their work is done.

And the Ombudsman felt they should not be compelled to assist you further, to transfer to a likely 'worse off' position, against their better judgement, so she didn't find in your favour.

My heartfelt advice to the layman unlikely to be dying soon but considering a DB pension transfer is:

Please don't use HARGREAVES LANSDOWN.

If you are unlikely to be dying soon, it removes one sensible reason to transfer, because the defined benefits will go on for a long time, so you are perhaps less likely to get a positive recommendation for the transfer. If you know up front that you're likely to want to transfer with or without a positive recommendation, you should ask the adviser up front whether they will help you with the transfer by telling a receiving scheme that they advised you on it. If they say they would not do that, but you want them to do that, you have the wrong firm.

Hypocritically, they still accept DB transfers at one remove.

If some advisor had told you that transferring from a DB scheme to a self-managed scheme was something that the advisor recommended, I expect HL would be happy to accept your money and let you self-manage it with them.

lvader

i’m surprised they even get involved in DB transfer advise, they are fine for smallish SIPPs. Its the current law that is the problem, DB transfers should work similar to going into drawdown where they point you to where to get advise and point out some of the risks.

londoninvestor

ZingPowZing wrote: »

Hargreaves Lansdown have a fee structure whereby they collect whether or not they make a positive recommendation.

I would argue this is much better than the alternative, which would create a very undesirable conflict of interest where the adviser had a financial gain to be made from advising you one way rather than the other.

They ought to be neutral and dispassionate in their advice, and the fee structure shouldn't incentivise them not to be.

jsinc

The only aspect that sounds potentially controversial is:
"wouldn't sign the other's application form, effectively thwarting the process until the deadline ran out"
But it's impossible to have an informed view on that without knowing exactly what it means/why, and if that delay cost you money.

I don't think HL offer independent financial advice anyway, so not sure why you'd choose them.

[Deleted User]

- They fear that in order to extract compensation from them for your own stupidity, you will say you didn't understand how valuable your DB was, and that you were only being insistent out of naivety, and any responsible professional should have stopped you in your tracks, and that you'd though that if they were happy to help you complete the transfer away from the valuable benefits by filling in the receiving scheme's paperwork, it couldn't be that bad really, so it gave you a false sense of security and seemed like tacit approval for your actions.

- As they do not want to be sued by such a customer (chasing compensation from anybody with deep pockets to bail him out of his own mistake); a person who has already been seen to not act rationally in the face of good advice - they decide not to sign your prospective receiving scheme's paperwork, as they do not want to be seen to assist you make yourself worse off.

Thank you for the condescsion bath, bowlhead.
You are over-reaching yourself.
I'm new to the forum, so don't know if it a character trait of bowlhead99

[Deleted User]

Full apology , bowlhead.
I just read through your blind report.
Entirely correct..

[Deleted User]

Chapeau again to bowlhead, Hargreaves Lansdown reacted to my suit exactly the way he said they would.

It cannot be stressed too highly,

Don't use Hargreaves Lansdown.

DairyQueen

ZingPowZing wrote: »

I'm new to the forum,

I'm not.

ZingPowZing wrote: »

so don't know if it a character trait of bowlhead99

It isn't.

HL are not IFAs and are not able to offer the regulated advice required for a DB transfer. End of.

Sounds like you misunderstood the service you were buying.

[Deleted User]

HL are not IFAs and are not able to offer the regulated advice required for a DB transfer. End of.

Wrong, DairyQueen.

I have the bill to prove it.

Best leave the discussion to avoid further embarrassment.

For the best..

FinancialCaptain

Speaking as someone working on DB Scheme's who is on the end of many a moaning conversation from people who don't understand the process, alongside seeing many dodgy looking transfer-out situations, to me
it seems HL have done everything correct, and i bet if you ask anything of this ahead of time and read through everything they had you sign, that would back it up, further evidenced by the Ombundsman agreeing with them.

Also highly agree a fee for either outcome is 100% the best option ,if they were only to be paid if they recommended the transfer that would cause problems. This is also, again, definitely something yuo agreed to when you signed up with them.

To put as a quick summary, you paid for advice, you received advice. That's really the end of it, it doesn't matter if you liked the advice or not.