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

Prism

NotaBene12 said:

Prism said:

NotaBene12 said:

dunstonh said:

And the alternative to science is what?
Magic? Tea leaves reading? Gut feeling?
This is precisely what I meant - the process is made deliberately obscure.

It is not made deliberately obscure.   It has a range of unknown variables that require some assumptions and variances on tolerances.
Tell me how science can tell us what risk profile the person has?  Or what their investment behaviour is going to be like? Can science tell us the date of death before it happens?   It's not all hard data that can fit into a calculation.

Please, don't take this as an accusation against yourself - judging from your posts you seem like a decent person who genuinely tries to assist. You deserve only kudos for your pro bono work here.

My post is not about you (or any other person posting here).

Back to your questions:

No, science cannot predict the exact date of death. Nobody can. But science (more precisely actuarial science, demographics and public health research) can provide us with probabilities.

The risk profile is also not a magic - it can be entered as "low", "medium", "high" on some sort of online calculator to find out the answer.

This should be a classical probabilistic model - and as such can should be open to scrutiny. The model used to predict Covid fatalities which was widely derided last year (but turned out to be roughly accurate) was available on the web for everyone to check and scrutinize. And many did so.

Nothing of this sort happens here. We are, instead, offered some sort of voodoo magic that in the hands of IFA1 can say "yes" in the hands of IFA2 can say "no". They might as well use some sort of oija board to come up with the answer.

Reading the FCA handbooks and guidance would enabled someone to at least follow the process surely. I doubt many who are looking to transfer have actually done that though.

FCA does not set the formula to be used - otherwise it would have been available as an online calculator (just as the tax calculator available on the HRMC site).

Well yes, there can't be a formula when it comes to subjective topics. However at least trying to understand the guidance might help with disappointment.

dunstonh

Please, don't take this as an accusation against yourself - judging from your posts you seem like a decent person who genuinely tries to assist. You deserve only kudos for your pro bono work here.

I won't and I consider this a discussion amongst adults.

No, science cannot predict the exact date of death. Nobody can. But science (more precisely actuarial science, demographics and public health research) can provide us with probabilities.

Actuaries don't actually have a great track record when it comes to pensions.   Life expectancy and projected investment returns in particular.    Life expectancy has, of course, been getting longer and gross investment returns getting lower.

Whilst reasonable people may accept that you cannot predict the unpredictable, we are in a regulatory environment where consumers will complain if the crystal ball was wrong the FOS will often uphold the complaint.   The FCA is overly cautious as well.  Probably not in areas where it should be but in areas where it shouldn't be.

The risk profile is also not a magic - it can be entered as "low", "medium", "high" on some sort of online calculator to find out the answer.

One person's low risk is another person's high risk.   Flow charted risk profiling has been found time and again to give the wrong outcome.   For decades, they have been trying to come up with the perfect risk profiling method and have failed.  Advisers are told not to rely on them and only use them as a basis point for discussion.  A lot of risk profilers ask the same question multiple times in different ways and people frequently come up with different answers that contradict the earlier ones.

We see it on this board (and the savings/investments section) regularly.  The poster claims they can accept high risk but then post panicking when it has gone down 1% a week later.

Human nature and behaviour can be erratic.    

The regulatory environment we live in blames the adviser for getting it wrong even when it is the individual that is to blame.

I once checked a case that I found to be well written and documented.  It showed how the portfolio fell during the dot.com period and covered off loss potential and confirmed the person accepted the volatility levels and potential losses.  It used a stochastic model as well.  It reduced the charges over what the person had previously and gave a good summary of the discussions and warnings.  During the dot.com period, the person complained they had lost money despite the growth over the years before that.    The complaint was rejected but the FOS upheld it and said the investments were too advanced for the individual to understand.  It used mainstream UT/OEIC funds. Nothing niche but they were considered advanced by the FOS.  It had also out-performed what they had previously.  However, the FOS instructed the adviser to pay the loss amount.  Luckily for the adviser, the complaint process took long enough for the recovery to kick in and it went back into surplus from the previous peak and resulted in no redress.   Although he had to pay a FOS fee and a couple of hundred pounds inconvenience money.   That is the sort of environment we live in.

<div>This should be a classical probabilistic model - and as such can should be open to scrutiny. The model used to predict Covid fatalities which was widely derided last year (but turned out to be roughly accurate) was available on the web for everyone to check and scrutinize. And many did so.<br></div><div><br></div><div>Nothing of this sort happens here. We are, instead, offered some sort of voodoo magic that in the hands of IFA1 can say "yes" in the hands of IFA2 can say "no". They might as well use some sort of oija board to come up with the answer.

</div>

But I am not sure the scientists have agreed in many areas.  Plus, you have to balance science with human behaviour and commercial issues.    How much can the economy suffer? how much can the Government support people before the markets consider the country a basket case which leads to other issues.     Models can be destroyed by unforeseen curveballs.

dunstonh

candie01 said:

Dale72 said:HappyHarry said:

The advice should only be negative if it is determined that it is not in your best interest to transfer.

There is a repeated implication on these boards that an adviser will almost always give advice to retain a DB pension as it is safer for the adviser.

This is not my experience, nor of other advisers in this area that I have spoken to. You should expect a good adviser working for a fee to give you advice suited to your circumstances, not theirs.

Nonsense, and I think most on here know it.

Definitely nonsense. I've spoken to 25 advisers. All have said I'd get Ando no transfer purely based on my age if 47. Some said come back to me when you're 50. 

As already mentioned in the thread, there are only a limited number of PI insurers that will offer coverage on DB transfers and at least one of them says only over 50s.

I am actually surprised you have spoken to 25 advisers and each one did DB transfers.  Only 1 in 10 advisers has the regulatory permissions to do DB transfers.  So, I would have thought you would have needed to speak to around 250 advisers to find 25 that do DB transfers.

Dale72

What a surprise that all the industry insiders on here have one view, yet many, not all, but many of the people that have dealt with the industry have a very different one!

Marcon

Dale72 said:

What a surprise that all the industry insiders on here have one view, yet many, not all, but many of the people that have dealt with the industry have a very different one!

Just goes to show what a slewed bunch of posters there are posting here - and plenty of them confuse 'the financial services industry' with the role of the FCA...

A quick look at what the FCA demands of advisers who advice on DB transfers gives a pretty clear indication of what, and just how much, they have to take into consideration: https://www.fca.org.uk/consumers/pension-transfer-defined-benefit/advice-checker

The clue is in the job title - 'financial adviser' [preferably independent!]. An adviser who gives vague and woolly 'advice' is pretty useless. If as a client you know so much better, then you don't have to follow that advice.

AlanP_2

Dale72 said:

dunstonh said:

Dale72 said:

HappyHarry said:

The advice should only be negative if it is determined that it is not in your best interest to transfer.

There is a repeated implication on these boards that an adviser will almost always give advice to retain a DB pension as it is safer for the adviser.

This is not my experience, nor of other advisers in this area that I have spoken to. You should expect a good adviser working for a fee to give you advice suited to your circumstances, not theirs.

Nonsense, and I think most on here know it.

What bit do you consider nonsense?   I cannot see anything in what HappyHarry wrote that could be considered nonsense.

All of it. Best interest of the client? If you can find someone that can be bothered to advise you when they know there will be no ongoing business for them, then you'll be lucky, or their fee from your pot size doesn't make it worth their while because of potential liabilities. Not saying these are not valid points or that an IFA isn't within their right to use them. Just saying none of it points to clients best interests.

I must be lucky then. Transfer analysis, positive recommendation and transfer to Royal London completed by IFA two months ago with no ongoing service wrap.

AlanP_2

Marcon said:

Dale72 said:

What a surprise that all the industry insiders on here have one view, yet many, not all, but many of the people that have dealt with the industry have a very different one!

Just goes to show what a slewed bunch of posters there are posting here - and plenty of them confuse 'the financial services industry' with the role of the FCA...

A quick look at what the FCA demands of advisers who advice on DB transfers gives a pretty clear indication of what, and just how much, they have to take into consideration: https://www.fca.org.uk/consumers/pension-transfer-defined-benefit/advice-checker

The clue is in the job title - 'financial adviser' [preferably independent!]. An adviser who gives vague and woolly 'advice' is pretty useless. If as a client you know so much better, then you don't have to follow that advice.

From your link this is paragraph probably applies to a lot of people in reality:

The pension you transferred was your only or largest guaranteed pension, and you had few other assets to support yourself in retirement.

That is underneath:

If you agree with any of the following statements, you may be more likely to have received poor advice.

RoadToRiches

Just had it confirmed in writing from Standard life

"If the DB pension has a value over £30,000 you do need to liaise with your financial adviser throughout the journey and if you go against the advice of your IFA, Standard Life can't accept the transfer in from the DB scheme."

In case anyone else is thinking of using them.  My current employer is using them for my contributions now.

Linton

NotaBene12 said:

dunstonh said:

And the alternative to science is what?
Magic? Tea leaves reading? Gut feeling?
This is precisely what I meant - the process is made deliberately obscure.

It is not made deliberately obscure.   It has a range of unknown variables that require some assumptions and variances on tolerances.
Tell me how science can tell us what risk profile the person has?  Or what their investment behaviour is going to be like? Can science tell us the date of death before it happens?   It's not all hard data that can fit into a calculation.

Please, don't take this as an accusation against yourself - judging from your posts you seem like a decent person who genuinely tries to assist. You deserve only kudos for your pro bono work here.

My post is not about you (or any other person posting here).

Back to your questions:

No, science cannot predict the exact date of death. Nobody can. But science (more precisely actuarial science, demographics and public health research) can provide us with probabilities.

The risk profile is also not a magic - it can be entered as "low", "medium", "high" on some sort of online calculator to find out the answer.

This should be a classical probabilistic model - and as such can should be open to scrutiny. The model used to predict Covid fatalities which was widely derided last year (but turned out to be roughly accurate) was available on the web for everyone to check and scrutinize. And many did so.

Nothing of this sort happens here. We are, instead, offered some sort of voodoo magic that in the hands of IFA1 can say "yes" in the hands of IFA2 can say "no". They might as well use some sort of oija board to come up with the answer.

Probabilistic models would be a terrible way to make major life decisions.  Someone aged 30 has about a 1% chance if dying in the next 10 years.  Clearly taking out life insurance to support dependents would be a waste of money.  Much the same can be said about buying house insurance - how many people's homes are destroyed or seriously trashed each year?

Why bother to get a Covid jab?  Only about 0.2% of the population have died from Covid.

A much better approach is to accept bad things will happen and then question whether one would be able to withstand the consequences.  That is the justification for insurance and covid injections, and in my view the only sensible basis for retirement planning.  It is the reason why most DB to DC transfers should not be recommended.  If you lose your life savings in a massive fall in the markets it is of little consolation that such a fall is exceptionally rare.  If you live to 100 having to scrape by on minimal income after spending your money on luxuries before survival became very unlikely wouldn't you wish you had been more prudent? 

Thrugelmir

RoadToRiches said:

Silvertabby said:

As for the flood of transfers out after the 'freedoms', many of these were by lower paid manual workers to whom a pot of money of, say, £50K, was the equivalent of a lottery win and a sum of money beyond their wildest dreams.  I know from several conversations that 'their' money wasn't going to be invested - it was destined to pay for a new car, kitchen, wedding, holiday etc.

Gilt rates are low, that won’t always be the case, the transfer values won’t be so attractive then that’s why sooner rather than later is best for me.

Nor can market performance of equities remain detached from economic reality indefinitely. Paying an ever increasing price for future profits is something constantly overlooked.