Who will accept a DB to SIPP transfer from "insistent client"

AlanP_2

Silvertabby said:

garmeg said:

AlanP_2 said:

garmeg said:

AlanP_2 said:

debaser1920 said:

Thanks a lot for this thread guys - my dad is currently trapped in a DB scheme with pretty terrible annuity options and we've been looking to transfer out, but ever since the IFAs got cracked down on, half of them have stopped advising on this at all and the other half more or less state upfront that they're advising against it in 100% of cases. Clearly, this has nothing to do with the fact that they now get their full fee with zero liability if they advise against transferring. It looks like we're going to have to go the route of the insistent client. 

Cheers!

What are these terrible options, and why are they terrible?

I have a deferred DB that does not increase once in payment so plan on transferring it but that sort of thing is very unususal.

Even that doesn't make it terrible. The lack of escalation would also be reflected in its transfer value (lower, potentially by a lot, than for an escalating pension) so you may not gain that much by transferring it.

I absolutely agree, "terrible" is in the eye of the beholder like "beauty".

For us, with good local gov DB pensions, then the transfer works out but if this was our only DB income then I don't think we would even consider it.

CETV is lower than many quoted on here to reflect the terms as you indicate. £9k annual = £224k CETV (this months quote, and at age 61.5). Not terrible but not shooting the lights out either.

That seems a decent CETV for a level pension.

If Alan means his LGPS pension, it isn't.  It's fully (and I do mean fully, not capped at 5% like some) index linked for life, and spouse's pension, also for life.  Plus if Alan has some pre 2008 service, then his automatic lump sum would be reflected in the CETV as well.

Nio chance of transferring that one. The LGPS is still building up and, with my wife's, will be the foundations of retirement income.

Malthusian

[Deleted User] said:

Clearly, this has nothing to do with the fact that they now get their full fee with zero liability if they advise against transferring.

Half right. Advisers are potentially liable if they advise against transferring and the client uses their recommendation against it to do it. So when you said "this has nothing to do with" that was the right half.

The F-pack effectively outlawed "execution only" service retrospectively around the beginning of the last decade. (Where a client would sign a letter to acknowledge they hadn't received advice and forfeited the right to complain.) Many advisers are operating on the assumption that facilitating a transfer on an "insistent client" basis will be retrospectively held to be misselling in exactly the same way at some point in the future. Those that aren't are either desperate for business, very happy-go-lucky, on crack, or all of the above.

Most advisers would also charge fees for implementation of the transfer and for ongoing advice, on top of the fee for the "transfer out or not" advice, which they won't be getting if they've recommended against it.

squirrelpie

Malthusian said:

Advisers are potentially liable if they advise against transferring and the client uses their recommendation against it to do it.

If that's the case then it would seem equally fair or reasonable that refusing to provide advice should also expose them to liability for whatever action the client takes. Neither seems sensible to me.

Malthusian

squirrelpie said:

If that's the case then it would seem equally fair or reasonable that refusing to provide advice should also expose them to liability for whatever action the client takes.

If you refuse to provide advice you've taken no money off the client and have no idea what they're going to do next. There's no chain of causality from refusing to provide advice to them losing money.

If you provide negative advice and sign the DB scheme's transfer form, you have taken money off the client knowing that the next thing they'll do is use that recommendation to go off and transfer their DB pension against your advice. Chain of causality + getting paid = liability.

Ten years ago it didn't seem sensible that someone who signed a letter saying "I acknowledge I have not received advice and have forfeited the right to complain" would have the right to complain that they'd received bad advice, but the consensus today was that the letter was probably a sham and they didn't know what they were signing, and people who wrote business on that basis in 2010 are now liable. It's not about what may seem sensible now but trying to imagine what the regulator might think in 10 or 20 years' time.

soonretire

[Deleted User] said:

coyrls said:
There are no annuity options with a DB pension.  If he has been offered annuity options, he has a DC pension.

My mistake, I thought "annuity" referred to any guaranteed yearly income for life. The paperwork does explicitly state that it's a defined benefit scheme. Now to try and find one of the few advisors who have not given up on providing transfer services.

I am considering MoneyHoney and Fidelity, and if anyone has had any success with either of these companies (or others) I'd love to hear your recommendations. Thanks!

I looked at MoneyHoney and found Fidelity were cheaper. With a higher transfer value it makes sense to go fixed fee rather than as a percentage. I also found some advisers would charge a fixed fee but then wanted me to commit to using their management service for the pot which you also need to take into account. Good luck with it

LisaJen

I am now tied up in the same situation. My pot is £720k and I was looking to take early retirement at 55 due to back problems. The advice I have been given is to stay in, take a £80k lump sum and a pension of £12kpa which doesn,t even cover my outgoings. The report then says that I should consider taking a part time job of a few hours a week to top it up as my back should be ok with that !! Just wow.
 I am definitely going to go down the AJ Bell route - has anyone completed this yet ? 

Albermarle

My pot is £720k and I was looking to take early retirement at 55 due to back problems. The advice I have been given is to stay in, take a £80k lump sum and a pension of £12kpa

You do not have a pot of money in a DB pension .You have rights to a guaranteed pension for life that you have built up during employment.

Separately the scheme will offer you a sum of money to buy you out , so they can rid themselves of the liability of paying you a pension ( usually inflation linked ) for maybe the next 40 years . This amount will vary depending on various factors in the financial markets at the time. I do not think there are any technical issues 'going down the AJ Bell route ' but you will have to decide how to construct a suitable investment portfolio from the £720K , or pay an IFA to do it for you.

£720K looks like quite a good offer, but to take an income from it at a sustainable rate for maybe the next 40 years , it may give you an income around £20K pa if you do not take the tax free lump sum . It could give you more if it is invested well, and financial markets do not go through an elongated bad patch and/or you are willing to run down the pot at a quicker rate in the 'hope' you do not live to a ripe old age .

It is a big decision.

LisaJen

Albermarle said:

My pot is £720k and I was looking to take early retirement at 55 due to back problems. The advice I have been given is to stay in, take a £80k lump sum and a pension of £12kpa

You do not have a pot of money in a DB pension .You have rights to a guaranteed pension for life that you have built up during employment.

Separately the scheme will offer you a sum of money to buy you out , so they can rid themselves of the liability of paying you a pension ( usually inflation linked ) for maybe the next 40 years . This amount will vary depending on various factors in the financial markets at the time. I do not think there are any technical issues 'going down the AJ Bell route ' but you will have to decide how to construct a suitable investment portfolio from the £720K , or pay an IFA to do it for you.

£720K looks like quite a good offer, but to take an income from it at a sustainable rate for maybe the next 40 years , it may give you an income around £20K pa if you do not take the tax free lump sum . It could give you more if it is invested well, and financial markets do not go through an elongated bad patch and/or you are willing to run down the pot at a quicker rate in the 'hope' you do not live to a ripe old age .

It is a big decision.

Thank you Albermarle - Sorry I know its a CETV I've looked at too many calculators with pot value ! The report I had was just a list of reasons not to transfer given the very generous £12.7k for life and very patronising, missing inheritance tax planning, the future ability to downsize our property and opining on my health. Luckily it wasn't expensive but neither was it good advice however its given me the option of a insistent transfer so I will accept that. 

Jeffmusicals

debaser1920 said:

» show previous quotes

My mistake, I thought "annuity" referred to any guaranteed yearly income for life. The paperwork does explicitly state that it's a defined benefit scheme. Now to try and find one of the few advisors who have not given up on providing transfer services.

I am considering MoneyHoney and Fidelity, and if anyone has had any success with either of these companies (or others) I'd love to hear your recommendations. Thanks!

Just to say that I contacted Money Honey today via their website and without asking for any more details thaN I had provided (Age 54, Old, smallish Nat West DB scheme advice needed), they declined to assist.
 “Having checked our workload, we are unable to take this case as we need to clear our current caseload before we consider taking in new ones”

Ho hum, back to the search and the drawing board 😀

LisaJen

Jeffmusicals said:

debaser1920 said:

» show previous quotes

My mistake, I thought "annuity" referred to any guaranteed yearly income for life. The paperwork does explicitly state that it's a defined benefit scheme. Now to try and find one of the few advisors who have not given up on providing transfer services.

I am considering MoneyHoney and Fidelity, and if anyone has had any success with either of these companies (or others) I'd love to hear your recommendations. Thanks!

Just to say that I contacted Money Honey today via their website and without asking for any more details thaN I had provided (Age 54, Old, smallish Nat West DB scheme advice needed), they declined to assist.
 “Having checked our workload, we are unable to take this case as we need to clear our current caseload before we consider taking in new ones”

Ho hum, back to the search and the drawing board 😀

If you have a Nat West scheme it might be worth contacting Willis Towers ( Good luck with that ! ) Although if you can access on line  its easier. They can refer you to LV on a fairly reduced fee  - LV after considering - very slowly I might add - might say yes but if they say no will give you the insistent transfer letter so that you can move forward - hope this helps and its worth looking at!