Legal & General Blocking Pension Transfers

[Deleted User]

So, I think the real reason for suspension isn't an arbitrary “20% uncertainty” but that the prices have dropped steeper than the shares. And a lot of these providers treated property as “safe”. And when investors see the drop they might start selling. And if too many do,  illiquid funds have a problem.  They cant sell fast enough. Also depresses property prices. 

Malthusian

Deleted_User said:

I understand closed vs open. What I don’t understand is how they define “20% uncertainty”. Who decides it? Why?

The fund's valuers will state whether there is a material uncertainty or not over their valuation of the funds' properties. If more than 20% of the fund's assets by value is covered by those caveats, suspension is not optional.

You are correct in saying that a commercial property OEIC could in theory have sufficient certainty over its valuations and still suspend due to a high level of outflows. However in the L&G Property Fund's case it's the 20% rule.

Given the impact of the COVID-19 virus outbreak on global financial markets, the Fund’s independent valuers, Knight Frank LLP, has introduced a material valuation uncertainty clause as of 18th March to its valuations of the underlying properties in the Fund. As this means we cannot be confident about the valuation of properties, in the interests of customers and in the light of our regulatory responsibilities we have taken the decision to suspend the Funds.This uncertainty is due to the unprecedented set of circumstance caused by the COVID-19 virus impacting market activity across all sectors. This means the independent valuers are unable to rely on previous market experience to inform their opinion of values of the properties held by the Fund.

We believe this suspension to be the fairest outcome for all investors, taking an appropriate forward looking view through the current crisis. While the Funds have sufficient liquidity to meet redemptions received so far, we have taken this action as a prudent and temporary measure until such times as these extreme conditions stabilise and the uncertainty around property valuations is removed. - L&G announcement

[Deleted User]

“ Knight Frank LLP, has introduced a material valuation uncertainty clause”.
Why are they not doing their job? Properties are bought and sold. Right now. That means they can be valued

[Deleted User]

From their website:

”UK commercial property investments & capital markets

As a tangible asset, commercial property investment offers security for investors that can protect against currency fluctuations and the increasingly erratic nature of the stock market and commodities.

With over 100 UK brokers across 11 regional offices we are uniquely positioned to identify high quality commercial investment opportunities tailored to your needs.”

https://www.knightfrank.co.uk/commercial/investment

They are selling something that has no price. Right now. And in a post from yesterday they explain that everything is great. 

 https://www.knightfrank.co.uk/blog/2020/07/08/office-investment-volumes-down-but-appetite-for-london-assets-remains-strong

paulbyrne60

dunstonh said:

Duns you are missing the point, Mate,  the property fund is less than 5% of my portfolio yet L&G are blocking the whole portfolio, so no partial xfers allowed, which is stopping my plans to draw-down an income, no draw-down no income, surely as a so called FA you can see the problem here, Yes.

I'm not an FA.  I am an IFA.

You have a product (probably an older one seeing as its L&G) and it doesn't offer the functionality of a modern plan.    Why do you think it should?   Do you moan that old black & white TVs don't display ultra high definition?  Or iPhone 1s don't do what the latest Iphone does?

It is normally recommended that you plan in advance of retirement. i.e. put your pension in the position you want it in around 6-12 months prior to drawing on it and not leave it to last minute. 

IFA or FA get over yourself.   
"I can understand your frustration certainly.  However, you cannot blame L&G."
As an I-FA  why do you feel its ok to lock in 95% of my portfolio when less than 5% is suspended, please share your logic without reference to some obscure analogy Duns

dunstonh

IFA or FA get over yourself.   

They are different things and my sig made it clear which I am.  

As an I-FA  why do you feel its ok to lock in 95% of my portfolio when less than 5% is suspended, please share your logic without reference to some obscure analogy Duns

It's your problem.  Not mine.  If you are going to be an !!!!!! about it then good luck to you.

Thrugelmir

Deleted_User said:

“ Knight Frank LLP, has introduced a material valuation uncertainty clause”.
Why are they not doing their job? Properties are bought and sold. Right now. That means they can be valued

A very different market to residential. Takes far longer to liquidate commercial property. 

cloud_dog

As an example of the current situation and the reason valuers may not feel confident in providing commercial valuations within a 'reasonable' range.... my employers have now pulled out of a planned HQ move to new offices.  If I were to hedge my bets I would say they will look at offices with smaller capacity.  My OH's employers were also going to be expanding office space due to acquisitions and relocation but, are now considering they may be able to continue 'as is' by undertaking office shifts, i.e. Group A in the office 2 days during the week and Group B in the office the remaining 3 days; following week switch so it is 3 and 2.

Having to WFH during COVID-19 has proven to a lot of companies that they actually can do it, can remain efficient and profitable.  Obviously, this is very much anecdotal in the office space arena but,  might a similar situation arise with shopping malls/shops, etc.  People have learn't to adjust, probably shopping more online, and so therefore what will that do to rents in the longer term, and therefore commercial property valuations?  After all, something is only really worth what someone is willing to pay.

Malthusian

paulbyrne60 said:

dunstonh said:

IFA or FA get over yourself.   

They are different things and my sig made it clear which I am.  

As an I-FA  why do you feel its ok to lock in 95% of my portfolio when less than 5% is suspended, please share your logic without reference to some obscure analogy Duns

It's your problem.  Not mine.  If you are going to be an !!!!!! about it then good luck to you.

Duns,
Far to precious or an ego Duns,  TBH most IFA are a waste of space only interested in their own pockets, that's why you never see a league table of IFA's who have consistently out performed the market for their clients, a decent mutual fund will beat 98.77% of IFA. Fact!

Have you made a formal complaint to L&G yet or are you actually only interested in trolling IFAs rather than resolving your problem?

[Deleted User]

Thrugelmir said:

Deleted_User said:

“ Knight Frank LLP, has introduced a material valuation uncertainty clause”.
Why are they not doing their job? Properties are bought and sold. Right now. That means they can be valued

A very different market to residential. Takes far longer to liquidate commercial property. 

They themselves are advertising commercial properties for sale right now. How can they do that if the price cannot be established?