DB pension transfer - IFA thought yes But his boss says NO - Stuck.

Ceme3000

Thrugelmir said:

Mick70 said:

Thrugelmir said:

Mick70 said:

  I am aware the risk of market crash but was using pessimistic 2% growth on my cetv and felt it would be £2m+ by time I retire.  I am also aware of the LTA  an political risks regarding this .

Where did you derive 2% compound growth from? 

I just spoke with the IFA , indication I got was that 3-4% growth (after fees) would be a realistic norm , so I used 2% to air on side of caution .  If you can’t get a fund to grow 2% and keep up with inflation you may as well put it all in a bank and cut out all risk IMO anyway ? Unsure what others think about this 

If only investing was that easy.  Indications are that corporate profitability in the US for 2019 may well end up being lower than was reported in 2012. Yet share prices are somewhat higher. Inflation has no bearing on corporate profitability. 

Out of interest, what figure would you use then in his position? You have to model your calculation on something. The OP appears to appreciate that markets occasionally crash and a long term return of 2% as a pessimistic outcome would seem sensible and pragmatic. 

Thrugelmir

Ceme3000 said:

Thrugelmir said:

Mick70 said:

Thrugelmir said:

Mick70 said:

  I am aware the risk of market crash but was using pessimistic 2% growth on my cetv and felt it would be £2m+ by time I retire.  I am also aware of the LTA  an political risks regarding this .

Where did you derive 2% compound growth from? 

I just spoke with the IFA , indication I got was that 3-4% growth (after fees) would be a realistic norm , so I used 2% to air on side of caution .  If you can’t get a fund to grow 2% and keep up with inflation you may as well put it all in a bank and cut out all risk IMO anyway ? Unsure what others think about this 

If only investing was that easy.  Indications are that corporate profitability in the US for 2019 may well end up being lower than was reported in 2012. Yet share prices are somewhat higher. Inflation has no bearing on corporate profitability. 

Out of interest, what figure would you use then in his position? You have to model your calculation on something. The OP appears to appreciate that markets occasionally crash and a long term return of 2% as a pessimistic outcome would seem sensible and pragmatic. 

Only hindsight can provide the answer that's the issue. "Markets" is a very generalistic term as is the word "crashes".  As very much depends on where and in what one is invested. Periods of underperformance (return of less than on cash) aren't unknown either. 

Personally we'll have sufficient secure guaranteed income for our needs. Anything above will be icing. Then there'll never be a need to worry about having made the wrong decision. 

Dox

xylophone said:

The requirement is to obtain advice from  a properly qualified person, not necessarily to follow it.
See https://adviser.royallondon.com/technical-central/pensions/transfers/safeguarded-benefits/
However, you may find that your proposed receiving scheme will not accept a DB transfer unless the advice is positive.

Third time this point has been made in 24 hours, so hopefully OP has now got the message!

MarkCarnage

All the above confirms my view that this whole area has become a sorry mess. 
FCA clearly don't really want DB transfers to happen but haven't got the cojones to say so.
IFAs now under the cosh, rightly in some cases....so the market isn't really operating here. This case in question indicates this. Why did it get to the very last hurdle before the IFA firm said no? Was this the 'triage' part or the full advice report? 
Again, if the requirement was really only to get advice, why are so many receiving parties refusing to deal with it. Clearly because no one wants a buck to stop with them, even if it shouldn't. 
There is a large 'regret' factor going to come in for all these people who pay for advice, then disagree with the conclusion, find that they can't actually do anything anyway although in theory they can, and then look for someone to scapegoat. Usually the wrong person. 

xylophone

 Was this the 'triage' part or the full advice report? 

I still can't make this out.  I asked

 Has the firm you approached told you that it will not take you on as a client as its "triage" indicates that it would advise against transfer and therefore will not advise you at all?

  Is the firm providing a suitability report?

The OP has said

They took me on as a client (charge £3.5k) to give advice and that advice is No from the manager . Have had no report or anything just email off the IFA (as I was chasing it up) apologising that his boss had said No.

Has he only paid for triage?

sandsy

xylophone said:

 Was this the 'triage' part or the full advice report? 

I still can't make this out.  I asked

 Has the firm you approached told you that it will not take you on as a client as its "triage" indicates that it would advise against transfer and therefore will not advise you at all?

  Is the firm providing a suitability report?

The OP has said

They took me on as a client (charge £3.5k) to give advice and that advice is No from the manager . Have had no report or anything just email off the IFA (as I was chasing it up) apologising that his boss had said No.

Has he only paid for triage?

A firm isn't allowed to tell someone that they won't take them on as a client as its "triage" indicates that it would advise against transfer. The regulator made that clear a while back.
Strikes me that the firm has really stuffed up here. It's really bad practice to tell the client it's OK to transfer before the advice has been checked internally - what sort of firm has such poor practices that it behaves in this way?

xylophone

Third time this point has been made in 24 hours, so hopefully OP has now got the message!

I've just noticed the OP asked about this late last year.

https://forums.moneysavingexpert.com/discussion/6061266/db-transfer-when-ifa-recommends-against#latest

Mick70

xylophone said:

 Was this the 'triage' part or the full advice report? 

I still can't make this out.  I asked

 Has the firm you approached told you that it will not take you on as a client as its "triage" indicates that it would advise against transfer and therefore will not advise you at all?

  Is the firm providing a suitability report?

The OP has said

They took me on as a client (charge £3.5k) to give advice and that advice is No from the manager . Have had no report or anything just email off the IFA (as I was chasing it up) apologising that his boss had said No.

Has he only paid for triage?

I have never received any report . I have paid (or will be) an agreed £ 3.5k and was told if goes ahead then the fee would be 0.75% of pot and the £3.5k refunded .  That is all I know .  

SonOf

Mick70 said:

xylophone said:

 Was this the 'triage' part or the full advice report? 

I still can't make this out.  I asked

 Has the firm you approached told you that it will not take you on as a client as its "triage" indicates that it would advise against transfer and therefore will not advise you at all?

  Is the firm providing a suitability report?

The OP has said

They took me on as a client (charge £3.5k) to give advice and that advice is No from the manager . Have had no report or anything just email off the IFA (as I was chasing it up) apologising that his boss had said No.

Has he only paid for triage?

I have never received any report . I have paid (or will be) an agreed £ 3.5k and was told if goes ahead then the fee would be 0.75% of pot and the £3.5k refunded .  That is all I know .  

So, you should be getting a report stating why they think it is not suitable to transfer.   The adviser firm is also required to confirm that you have received regulated advice.    

Durhamborn

The knack to get a DB pension transfer done is to understand the system.The FCA is a disaster and have decided they want to protect the dumb idiots who lose/spend the lot,instead of accept in life there are always some losers.To protect those people they are trying to stop everyone doing a transfer.I dont blame IFAs for the position they are in.I blame the FCA 100%.
However if you want to transfer you need to do a few things.Forget a transfer (at first) into your SIPP.IFAs wont touch those now,and even if an insistent client they wont facilitate as they will have the get out of "its reckless".
So your approach needs to be this.You approach an IFA and let them know you want to transfer and leave it with them to invest until pension age,and then during drawdown.The IFA then gets the big fat fee upfront,and then ongoing fees.That makes them more likely to entertain you.They will say there is less risk once they are managing,though the extra 1%+ fee a year is also in their minds.They will mostly come back with a no,but as long as its not reckless they will let you know you can still ask them to go ahead.
You need to understand how to answer the questions.The best (and valid) reasons to transfer are no spouse,(so 50% spouse pension worthless) ill health (if you havent any make it up,) you have other assets and want to transfer for inheritance tax planning (drawing other assets while leaving pension untouched until 75).
Once transfer is done,then simply transfer into your own SIPP.You can transfer then as its a personal pension or SIPP usually within 10 days if its part of the Origo system as most platforms IFAs use are.
Job done.
I did mine because iv had cancer,heart disease and no spouse,but 3 children.Iv also invested since i was 14.Really glad i did.44 times pension CETV.I fully intend to only take the natural yield (at most) and leave the capital to my kids.
I think you should have to take an exam if you want to transfer a DB pension,maybe £500 and if you pass you can transfer without an IFA.
They are shutting the door on people who should transfer to protect the "iv always wanted a motorhome/yes carbon credits sound good,oh and pink diamonds" brigade.
With 15 year gilts below 0.9% i doubt there will ever be a better time in history to transfer,and yet the door is being closed.