Don't use Hargreaves Lansdown
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I do find it interesting that within (presumably) a short time, two different IFA's could come to opposite conclusions on the same question.
Ask two economists a question and you'll get ten different answers. Independent financial advice is not that far removed.
It's both art and science. In an art there are no right answers or wrong answers, in a science there is one right answer, in an art/science there are multiple right answers (and infinite wrong answers).
The other adviser may have had looser standards in their desire to get the business (especially if they used contingent charging) or it could easily be a genuine professional difference of opinion. There are many borderline cases where the same adviser could make a fully-compliant recommendation to transfer and an equally compliant one not to transfer.0 -
Albermarle wrote: »If your DB scheme has a NRD of 65 and has a projected pension of £15,000 pa ( as an example ) ... At 60 years old you are offered a CETV of £450K or the possibility to take the DB pension early but reduced to say £12K , ... Is the scheme offering an income of 3.33% on the CETV ( £15K /£450K ) or 2.66% ( £12K/£450K) ?
Or in other words a multiple of 30 or 37.5 ? ... I suppose one issue is if you have an extra 5 years to make the money last .
In general a 450k CETV would be likely to be too high to fit my own criteria for being nearly a no brainer. To get to a description that absolute for non-short life expectancy I'd usually want to see:
1. no investments beyond money market, so about nil investment risk
2. a combination of state pension deferral and level or other annuity that clearly beats the DB for guaranteed income.
3. or some combination of those with some other clear benefit, and still largely guaranteed income.
4. a nod to death benefit considerations: term life insurance might be needed to match death benefits because post 2016 only pays a few months of state pension and lump sum payments of some DB might be better.
Close to state pension age up to ten years of deferring can work but cash and the number of years in cash makes it gradually harder. In practice this means transfer values up to around ten times the combined state pensions plus level annuities matching the DB portion that isn't inflation linked. A 450k CETV is likely to be too high unless lots of the DB has no inflation increases.
Essentially, higher income and no investment risk leads to a pretty much unassailable transfer case. Though the FOS and FCA can be strange sometimes...
There are other cases, like the person who was considering lump sums from three DBs who could do better taking max income from two and CETV from the third due to the difference between commutation and CETV multiples.
As soon as investments and SWRs become involved things like risk, capacity for loss and attitudes and experience of the individual come into play and words like superb or excellent become the strongest I'd want to be using.0 -
I do find it interesting that within (presumably) a short time, two different IFA's could come to opposite conclusions on the same question.
Say state pension deferral is involved. I had a chat with an adviser who doubted that the state pension would be around and who might be negatively inclined towards that component.
The client's investment experience, weighting of objectives, attitude to and understanding of risk and volatility and their capacity for loss have subjective aspects even if firms try to standardise somehow.
Each adviser will also have their own experience and risk tolerance that can leak into their perceptions and assessments.
Given one firm describing a case as borderline it's not remarkable that firms can differ. And anyone having a case as good as borderline is quite far from the bad mistake prevention parliamentary and legislative intent for the advice requirement.0 -
Good morning.
Well, just to catch up with various points:
The alternative SIPP provider was/is Xafinity Simply SIPP.
Thoroughly recommended for those who wish to exercise full control of their pension.
No, they did not require a positive recommendation, merely the sig of a financial adviser on their application.
No, I did not "change my story" one whit, the next IFA enthusiastically recommended a transfer.
The question I asked Hargreaves Lansdown and the FO was Who are these reputable firms that clients can turn to in the event of a negative recommendation? HL won't say and the FO wouldn't investigate, stating only that the statement was made "presumably in good faith."
I'm not sure how knowledgeable Malthusian is about the financial services industry but if he is correct in asserting that the number of SIPP providers willing to accept a transfer on HL's terms is low or singular, then Hargreaves Lansdown's process is not just bogus but borderline dishonest.0 -
ZingPowZing wrote: »Good morning.
Well, just to catch up with various points:
The alternative SIPP provider was/is Xafinity Simply SIPP.
Thoroughly recommended for those who wish to exercise full control of their pension.
No, they did not require a positive recommendation, merely the sig of a financial adviser on their application.
No, I did not "change my story" one whit, the next IFA enthusiastically recommended a transfer.
The question I asked Hargreaves Lansdown and the FO was Who are these reputable firms that clients can turn to in the event of a negative recommendation? HL won't say and the FO wouldn't investigate, stating only that the statement was made "presumably in good faith."
I'm not sure how knowledgeable Malthusian is about the financial services industry but if he is correct in asserting that the number of SIPP providers willing to accept a transfer on HL's terms is low or singular, then Hargreaves Lansdown's process is not just bogus but borderline dishonest.
I take it you already had a SIPP in mind and just wanted a FA to sign off your DB scheme. HL advice was against your wishes. You wanted HL to recommend a SIPP to you. HL refused to do so. Hence your only gripe is you had to pay HL for their recommendation.
I take it that you don’t like paying for advice or heeding advice. You only wanted some advisor to recommend a SIPP that you manage in case that went bad. It hasn’t.0 -
Let's be clear.
You had a DB pension and regardless of whether or not the recommendation was positive, you were determined to transfer out.
What you actually wanted was a Pension Transfer Specialist who would do the necessary work and provide the DB Scheme Administrator with
a written statement 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.
on the basis that
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.
This would have enabled you to have the DB administrator agree to the transfer out (the first step).
You then needed a new provider to accept the transfer - you discovered that not all will accept DB against advice - however, some do ( you needed to research which would) or the information in post 61 might have been relevant.
You needed to have done your research beforehand and obtained confirmation from the PTS you chose that regardless of whether or not his advice was positive, he would provide you with the written statement as detailed above.
You don't seem to have obtained this confirmation from the HL PTS before agreeing to use their services?
HL/the PTS have nevertheless provided you with some sort of limited service and want paying for it.0 -
ZingPowZing wrote: »if he is correct in asserting that the number of SIPP providers willing to accept a transfer on HL's terms is low or singular
With some help from me in the form of possible candidates, are you interested in doing checking to see which actually are willing? If you are, I'll link that discussion from the safe withdrawal rate topic to help others avoid the nasty position you ended up in.0 -
With some help from me in the form of possible candidates, are you interested in doing checking to see which actually are willing? If you are, I'll link that discussion from the safe withdrawal rate topic to help others avoid the nasty position you ended up in. jamesd
Yes absolutely.
it would have been very useful to me at the time and my hope was that the FO would provide this information online in their case study.
I would stress that the best approach at the outset is to avoid Hargreaves Lansdown altogether but would be more than surprised if there are not other HL clients already in this predicament.0 -
ZingPowZing wrote: »Yes absolutely.
it would have been very useful to me at the time and my hope was that the FO would provide this information online in their case study.
I would stress that the best approach at the outset is to avoid Hargreaves Lansdown altogether but would be more than surprised if there are not other HL clients already in this predicament.
Have you paid for this advice yet?0
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