Financial advisers turn back on pension transfer work

Thrugelmir

Benny2020 said:

But those that want to transfer can't afford to be charged thousands only to be told not to transfer.

Time has to be paid for. A solicitor charges whatever the outcome. Running a business is somewhat different to listing a few items on Ebay as a hobby. 

MarkCarnage

Perhaps a simpler first stage 'triage' assessment, as some advisers already employ should be used more widely, with a much lower level of cost involved to determine if it's even worth moving to the next stage. I believe that the FCA concerns over the rate of positive recommendations given doesn't take account that these are post triage. 
I would be sorry to see it go, as in some cases, still the minority, but a significant one, it can be in the interests of both the individual and the DB scheme for a transfer to take place. Yes, it is probability based, but the probabilities are very high in such cases, and where an individual has other sources of income even an adverse outcome should not be significantly negative overall. 

Benny2020

So if I can't transfer my DB I am stuck working for another 5 years, for me time is more important than money.

Benny2020

Thrugelmir said:

Benny2020 said:

But those that want to transfer can't afford to be charged thousands only to be told not to transfer.

Time has to be paid for. A solicitor charges whatever the outcome. Running a business is somewhat different to listing a few items on Ebay as a hobby. 

Do you think someone would be happy to pay thousands only to be told to do what they were already doing?.

xylophone

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Circumstances in which advice is required

Section 48 of the Pension Schemes Act 2015 and regulations made under it require pension scheme members who have subsisting rights in respect of safeguarded benefits worth more than £30,000 under the scheme to take appropriate independent advice from an FCA authorised adviser before:

• converting safeguarded benefits into flexible benefits (or in the case of benefits which are both safeguarded and flexible, into different flexible benefits)

• using a transfer payment in respect of safeguarded benefits to acquire flexible benefits under another scheme

• being paid an “uncrystallised funds pension lump sum” (UFPLS) in respect of their safeguarded benefits. 

Where a person has accrued a Guaranteed Minimum Pension (GMP) in respect of contracted-out employment between 6 April 1978 and 5 April 1997, this is a right to a level of pension income calculated by reference to their earnings in that employment, which is revalued either by a fixed revaluation rate or in accordance with national average earnings before coming into payment, and then inflation linked during payment. Pension benefits which represent, or include, a GMP are therefore safeguarded benefits. Similarly, pension benefits accrued after 1997 under a scheme contracted out under the “Reference Scheme Test” (also known as section 9(2B) rights) must guarantee a minimum level of annual income, calculated by reference to salary. Such benefits are therefore safeguarded.

However, there may be cases where liability for such contracted-out rights has been transferred from an occupational pension scheme under a buy-out policy and the member’s fund under the policy is greater than the amount needed to provide the required minimum level of pension. In that case, if there are excess funds remaining after a pension at that level has been secured, the member’s remaining benefits under the policy may be money purchase or cash balance benefits (and therefore not safeguarded), if there is no other income guarantee attached to them. 

Buy-out policies (including Section 32 policies)

Where a member’s accrued benefits under an occupational pension scheme have been “bought out” (i.e. the scheme’s liability has been discharged by the purchase of a deferred annuity or insurance policy), the benefits under the contract or policy will be safeguarded if an amount of pension income is secured, or if a liability in respect of contracted out rights (such as a Guaranteed Minimum Pension) has transferred under the contract or policy to the provider, or if the terms of the contract or policy otherwise include a guarantee about an amount of pension income or a rate of conversion into an income.

kuratowski

Benny2020 said:
Do you think someone would be happy to pay thousands only to be told to do what they were already doing?.

Isn't that exactly what happens every time you buy a house?  You pay the solicitor to make sure you're not making a mistake.

Scrudgy

So my IFA says his firm will not touch my wife’s DB pension, even though he agrees that it is definitely suitable for transfer due to the decent CETV but poor annual pension, which gets even worse come state pension age when an abatement kicks in.

He even said he would transfer it if it was his pension, but apologised that his firm had taken a decision not to do any DB transfers.

Very frustrating when even the IFA says its a no brainier, but sorry can’t help. 

Thrugelmir

Benny2020 said:

Thrugelmir said:

Benny2020 said:

But those that want to transfer can't afford to be charged thousands only to be told not to transfer.

Time has to be paid for. A solicitor charges whatever the outcome. Running a business is somewhat different to listing a few items on Ebay as a hobby. 

Do you think someone would be happy to pay thousands only to be told to do what they were already doing?.

Unfortunately there's no way of knowing whether people do or don't. Not the role of any advisor to assume anything. Easy to pretend one knows and in essence bully to get ones own way. The world is full of such people. 

fred246

I once asked an IFA to have a look at my pension. She refused saying there would be nothing left of it when she took her fees out. I always thought that was the reason for mandating IFAs to look at DB transfers. People wouldn't do it because the IFAs would take so much out in fees that any gains would be lost.

[Deleted User]

Isn't that exactly what happens every time you buy a house?  You pay the solicitor to make sure you're not making a mistake.   That's a pretty good analogy, if the solicitor was trembling with fear that a purchase would lead to a potential future liability.