Don't use Hargreaves Lansdown

AnotherJoe

GDB2222 wrote: »

If the OP paid for a full advice service, I think it's inherent that that requires confirmation to the DB scheme.

If he did. There are two different services (as in post 14) and it's not clear which one OP paid for. Most likely, since the ombudsman found in favour of HL it was the cheaper value comparison, which is not (AIUI) advice.

DairyQueen

bowlhead99 wrote: »

JoeCrystal highlighted HL's service offering in post #15, which is a two stage process.

Firstly for £1250+vat (which is a flat fee for any size of pot and a lot lower than what IFAs typically charge for DB pension transfer advice, from anecdotes on this forum) they will conduct a Transfer Value Analysis. This is presumably the report described by FCA in the 2018 COBS update for pension transfers as a "Transfer Value Comparator" - which indicates the value of the benefits that would be given up (what it would cost to replace them).

Then having created that report (which would be a mandatory precursor to actually giving advice, and which FCA say should form part of the overall advice/recommendation eventually given), if you decide to proceed to a recommendation having seen the analysis, they can go on to sell you proper advice / recommendation and implement it for you. The cost of doing that is on a percentage of assets basis. So a (say) £500k pot would cost £7k for a recommendation having paid the token £1.25k+ VAT for initial value analysis.

They will need to be paid the £1.25k whether or not the pension transfer appears to be 'good value'.

It's not clear from the OP whether, after they conducted the flat-fee value analysis (e.g., you have a CETV offer of £500k but it would cost £700k to obtain a comparable level of income from an insurer), what happened next.

Was he told that they didn't want to sell him a 'recommendation' for £7k on whether to transfer and how to invest the £500k, because their recommendation might be: don't do it at all? So he is out £1.25k and needs to engage a different adviser if he wants to be able to tell a receiving scheme that he's been advised on the transfer: because all he knows so far is a likely real-world cost of replacing the benefits, compared to the CETV offered - and has not actually been formally advised how best to go forward with a transfer?

Or, perhaps the OP decided that he should proceed to the recommendation stage because he really wanted to do the transfer come what may, and he needed that 'regulated advice / recommendation' to be able to move his money to HL or to anywhere else, so he paid them the £7k for a full recommendation [for a £500k pot, just my example figures], and the recommendation was don't do it.

If it's the latter case, I can see Jamesd's point that: advice has been received and the receiving scheme should be able to review the reports and the invoice for the advice service and determine for themselves that advice has been received in relation to transferring out of this specific scheme. For their risk management/ internal control procedures, they also have to verify that advice was provided (i.e. there is a risk that OP faked the report to save himself some cash) - in which case they should be able to verify with HL that the advice did take place, otherwise HL are deliberately obstructing the aims of the legislation.

However, if it's the former case, and advice has not actually been provided because either (a) HL declined to provide the advice / recommendation service after they had already shown through the TVC report that the CETV was worse than the guaranteed benefits ; or (b) the client did not want to "proceed to a recommendation" for £7k knowing it was likely to be negative, instead hoping his initial £1.25k spend was enough to qualify for a transfer with someone else; then HL should not need to tell the receiving scheme that they advised him on the transfer, as all they did was produce a value analysis report.

I will admit to not having read all the primary legislation on what exactly constitutes the required level of 'advice' for a transfer. Perhaps the published FOS decision will shed more light on the facts, circumstances and reasoning.

The FCA published a consultation paper in March 2018. It covers various outsourcing arrangements that advisors may operate with other firms. It includes functions/boundaries/liabilities between triage/valuation services and pension transfer specialists.

This was followed, in October 2018, by revised rules and guidance.

As I understand the HL model, they do not provide an in-house pension transfer specialist service. However, they do offer triage/valuation services.

I also look forward to reading the ombudsman's decision in this case. HL has been extremely wary of direct involvement (i.e. anything that smacks of 'liability') in the DB transfer market since 2016. I believe they have refused to accept such transfers, even with a positive recommendation, since then. I would be gobsmacked if they have taken personal responsibility for providing full DB transfer advice, rather than the triage/valuation service which you describe.

OP doesn't provide sufficient info on the service they contracted from HL and/or A N Other company. Perhaps s/he would care to do so?

Albermarle

I checked another SIPP providers ( Fidelity) to see what they offer. It seems that as part of their paid for advice service they can offer advice on defined benefit transfers although it is not 100% clear ( cost is £3500 + VAT ) Presume they have ben watching this case carefully !
Although they also make it clear that they can only offer a Fidelity drawdown product and that they will generally not accept DB transfers with a negative recommendation.

[Deleted User]

Good morning,

Thank you for all the responses.

There was a time when HL were not accepting DB pensions directly but now they do, potentially.

Terms were understood . I asked Hargreaves Lansdown for their recommendation, in full knowledge that I was to be liable for their fee.
Why? The inducement offered at the outset is that the adviser will likely provide a clear indication of the suitability of a transfer before the client commits to a recommendation. At that point, between the analysis and the report, if the adviser states that the client's case is "in the balance", and the client commits to buying that report, then the client is trapped. The adviser will simply gather information sufficient to justify a negative recommendation. Not that the process will be described in such terms while the client is deciding whether to go forward: finding another provider for an insistent client will seem like the simplest step in the world.

Their small print states that HL will not "facilitate" a transfer for an insistent client. In practical terms that means, if you do find an alternative SIPP provider, Hargreaves Lansdown won't liaise with him. I did have both on call at one point, and the HL adviser would not speak with the other.
As a way out of the impasse, I offered to sign a waiver, indemnifying Hargreaves Lansdown from any future liability.

Anyway, the deadline passed and I had to start again. The long view is that I am very content to have transferred my pension, I just wish I had gone about it in a different way and hope I can deter others from following my route.

[Deleted User]

The adviser I used is a Hargreaves Lansdown pension transfer specialist.

[Deleted User]

"Or, perhaps the OP decided that he should proceed to the recommendation stage because he really wanted to do the transfer come what may, and he needed that 'regulated advice / recommendation' to be able to move his money to HL or to anywhere else, so he paid them the £7k for a full recommendation [for a £500k pot, just my example figures], and the recommendation was don't do it."

Correct, although, as a layman I was open to persuasion on the merits of the transfer. If the report had convinced me, I should have been happy to pay for a negative recommendation.

DairyQueen

ZingPowZing wrote: »

The adviser I used is a Hargreaves Lansdown pension transfer specialist.

Do you mean:
a) the PTS was employed by HL?
or
b) the PTS was an IFA who contracted to undertake PTS work on behalf of HL?

[Deleted User]

a) the PTS was employed by HL

xylophone

https://adviser.royallondon.com/technical-central/pensions/transfers/safeguarded-benefits/


What form does the confirmation of receipt of financial advice take?

The individual must confirm to the scheme administrator they have received financial advice before the transaction can proceed. This confirmation must be provided within 3 months of the individual receiving the safeguarded benefit value from the scheme administrator.

The confirmation must take the form of a written statement from the adviser confirming all of the following:

They have provided financial advice to the individual on the proposed transaction.
They have the appropriate permissions to carry out the transaction.
The adviser's FCA registration number to carry out the transaction.
The individual's name and the name of the scheme in which they have the safeguarded benefits.
The adviser does not necessarily have to agree with the proposed transaction to provide this confirmation. They are simply confirming that they have provided advice on the proposed transaction to the individual.

TBC15

Kentish_Dave wrote: »

If you’d appreciate the perspective of a professional, this is like complaining to the GMC that your GP refused to write a letter to the surgeon who you’d asked to staple your testicles to the 09:20 departure from King’s cross to York, as he feared that any communication could be seen as tacit acquiescence.

If your GP gives this advice I’d defiantly report him to GMC departure times Mon-Sat 09:06 or 09:30 Sun 09:22:rotfl: