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Possible Transfer Value and Advice

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  • Albermarle wrote: »
    Just be aware that finding the right type of IFA , with the right qualifications , who is willing to do the work can be difficult . So might be easier to stick with the work one . As already said.

    Indeed. I am now veering to leave it where it is anyway because it seems like such a faff.

    However my main issue is that my husband is 9 years older, so if I go after him there will be nothing - which is fine if I last till 96 but not so great if I die at 60 (for example). My family don't have a great track record - oldest grandparent died at 74 and oldest parent at 71. I know that doesn't mean that I will go early......but is the reason why I was thinking of transferring out in the first place, as I wanted to leave a pot for my children.
  • DoxDox Forumite
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    Be careful as some advisers will not sign off on the transfer if the advice is negative, and also some ceding schemes require a positive recommendation.

    All the ceding scheme will require is confirmation that the member who wants to transfer out has received advice. They certainly can't start imposing conditions on whether that advice was to transfer or stay put (and most schemes will decline to see the advice, to further endorse the message that it is a decision for the member).

    As for the adviser, they don't need to sign off on the transfer; they need to sign whatever form the ceding scheme requires to confirm advice has been provided.
  • Dox wrote: »
    All the ceding scheme will require is confirmation that the member who wants to transfer out has received advice. They certainly can't start imposing conditions on whether that advice was to transfer or stay put (and most schemes will decline to see the advice, to further endorse the message that it is a decision for the member).

    As for the adviser, they don't need to sign off on the transfer; they need to sign whatever form the ceding scheme requires to confirm advice has been provided.

    Many thanks, a lot to think about.
  • MalthusianMalthusian Forumite
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    jimi_man wrote: »
    Makes me think that there is a market opening for such a person, who will always give negative recommendations and can charge much less than other people. It doesn't seem that there would be any liability involved as it's a negative recommendation, but the criteria for taking advice has been fulfilled!

    No adviser will do that unless they are crooked. And if an adviser is crooked the charges are likely to be much higher than you think.

    A recommendation not to transfer a DB pension is high risk, e.g. because if the client dies unmarried, their children will come waving torches and pitchforks asking why the adviser screwed them out of hundreds of thousands of pounds. Or the client will complain years down the line if the stockmarket booms and they calculate they could have been much better off.

    This is why increasing numbers of reputable advisers refuse to advise on DB pensions at all and professional indemnity insurers refuse to cover it except for eye-bleedingly high premiums.

    To operate in the way you describe the adviser would have to a) ignore their training and their professional responsibility to give best advice, b) prepare an exit-scam so they can dump the eventual liabilities on their PI insurer or FSCS and swan off into the sunset, rather than paying them out of their own money, c) lie to their PI insurer (because otherwise their PI costs will eliminate the ability to charge peanuts). This would make them a crook.

    Anyone prepared to follow this business model would have no reason not to go the whole hog and tell their clients that actually transferring out is a brilliant idea because they can make superhot fire returns from dilapidated monasteries in Leipzig and carbon storage sheds in Laos.

    The fact that advising people to transfer out of a DB scheme is high-risk doesn't mean the opposite is automatically low-risk. Both advice to transfer out and advice to stay put could leave the client hundreds of thousands of pounds worse off and it's impossible to know which will be the case. That makes both those things high-risk.

    If you pay an adviser for a formal recommendation (expect this to cost several thousand pounds) they must sign the declaration to say they have given advice. Refusing to do so is essentially a) lying and b) not doing the job you paid them for. However, you should still ask them upfront whether they will sign the declaration if the advice is negative. Because you don't want to have to go through the Financial Ombudsman to force them into it.
  • Malthusian wrote: »
    If you pay an adviser for a formal recommendation (expect this to cost several thousand pounds) they must sign the declaration to say they have given advice. Refusing to do so is essentially a) lying and b) not doing the job you paid them for. However, you should still ask them upfront whether they will sign the declaration if the advice is negative. Because you don't want to have to go through the Financial Ombudsman to force them into it.

    Thank you. I have a further meeting with the Advisor next week and am going to ask – if you recommend not to transfer, and I then decide to go ahead, will you advise my Final Salary Scheme that you have given me all the info (and I have decided to go against this). I will also phone the Scheme helpline and ask them if this is sufficient.

    Of course, this may be academic as they may recommend a transfer based on my info, or I may decide to stick with the Scheme anyway.

    All would be much simpler if I knew my date of death! Always had it in my head that I won’t make old bones but my predicating skills are not great.......
  • JoeCrystalJoeCrystal Forumite
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    All would be much simpler if I knew my date of death! Always had it in my head that I won’t make old bones but my predicating skills are not great.......

    Well, according to the ONS, you got a 50% chance to live to 84, a 25% chance to live to 92 and a 10% chance to live to 97. :)
  • MalthusianMalthusian Forumite
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    Indeed. I am now veering to leave it where it is anyway because it seems like such a faff.

    The FCA thinks that 9 times out of 10 that is the correct decision. If a few months of admin are enough to deter you from transferring then that suggests it isn't a good idea.

    Transferring out of a DB scheme is a highly risk-seeking decision so any investor for whom it is suitable should be champing at the bit at the thought of having to deal with all that money invested in the stockmarket, with all the extra admin and worry associated with that. I'm the kind of person who would if the price was right (as are many forum regulars) but I'm in a minority.
    However my main issue is that my husband is 9 years older, so if I go after him there will be nothing - which is fine if I last till 96 but not so great if I die at 60 (for example).
    True, but you'll both be dead. Defined benefit pensions are designed on the assumption that the members want guaranteed income in retirement and not an inheritance.

    And your heirs will still get your defined contribution pensions and any assets in your estate.

    If leaving an inheritance is a priority you could look at using the DB income to buy whole of life insurance and / or investing surplus income.
    My family don't have a great track record - oldest grandparent died at 74 and oldest parent at 71.
    What kind of health were they in at 55 and how does that compare with yours?
  • MallyGirlMallyGirl Forumite, Board Guide
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    It is tricky. I am still considering transferring my FS pension out but it may not even be possible by the time I get to an age where I want to do it. My case is different though in that my transfer value is 50x the annual pension and that pension is only £1875 pa so would not even pay my fuel bill. Transferring it into my SIPP would simplify things for a relatively low risk (to me).
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  • MalthusianMalthusian Forumite
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    JoeCrystal wrote: »
    Well, according to the ONS, you got a 50% chance to live to 84, a 25% chance to live to 92 and a 10% chance to live to 97. :)

    I normally caveat the ONS stats by pointing out that a lot of the 50% who won't live to 84 have serious illnesses or congenital disabilities that the OP already knows they don't have (or they'd've mentioned it). When doing their own calculations they have to kick those people out of the equation which bumps up their own odds of living longer. Plus they have lots of money, plus they use a high level of spelling and grammar.

    However the OP's family history of health issues might come into play depending on how relevant it is. There are plenty of genetic indicators of lower life expectancy but there are also plenty of families with multiple generations who died in their 70s because they worked for long periods with dangerous chemicals, or didn't go for a jog often enough.
  • Malthusian wrote: »
    What kind of health were they in at 55 and how does that compare with yours?

    Dad was dead at 51 and Mum had dementia from her early 60's......which I am sure explains why I want to transfer in a nutshell!

    Many thanks all for your helpful replies. It has given me a lot to think about, I'm now going to go to the spreadsheets to look at all the possible scenarios.
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