Can't get IFA advice to transfer a small DB pension short of 12% fee. Ideas?

timmillea

I am 18 months off being 55. I have tried for 3 years - every time the 3 months 'free transfer window' opens - to transfer my small (£36 pw at age 67) DB Universities Superannuation Scheme pension to a DC pension, without success. Short of the quoted 'industry standard minimum' £5,000 fee for FCA-compliant advice - which amounts to almost 12% of the entire CETV. I refuse to be a victim of the next financial mis-selling scandal.

I have studied FCA ps20-06 (new regs coming in 1st October) and there is not one mention of means tested benefits, Pension Credit or the like. It is a document regulating the rich industry interested only in rich clients.

As things stand, my USS pension will be wholly absorbed by means-tested state benefits, i.e. it will be worthless, apart from the meagre lump-sum, at around 8% of the current CETV. The FCA regulations to FAs are for me to lose 92% of the value of my pension and have plenty of calculations and tables to show why this is right and I am wrong. Ther is no discussion possible with them except to explain to me in idiot terms why I am wrong and that state benefits are not relevant. 

As the CETV is over £30k, I am required by law to obtain advice to transfer, even though I know the narrow FCA regulations are not to. 

I am in the position of having to surrender 12% of my pension to an adviser who I will ignore and then have a very limited selection of schemes who are prepared to receive a transfer without positive advice. 

The FCA seems to swap one mis-selling scandal for another yet always protects the financial professionals.

Exhausted this season and I only have one season left.. It has been a very long 3 months. Any creative ideas would be most welcome.

Thrugelmir

If the "professionals" wanted your business don't you think that the price would be more competitive?   No one is forcing you to transfer either. Any scandal would be most likely self inflicted. 

Marcon

timmillea said:

I am 18 months off being 55. I have tried for 3 years - every time the 3 months 'free transfer window' opens - to transfer my small (£36 pw at age 67) DB Universities Superannuation Scheme pension to a DC pension, without success. Short of the quoted 'industry standard minimum' £5,000 fee for FCA-compliant advice - which amounts to almost 12% of the entire CETV. I refuse to be a victim of the next financial mis-selling scandal.

£5K is not an 'industry standard' charge. You say you 'refuse to be a victim of the next mis-selling scandal' but the only way you'd be a victim is by transferring without your adviser doing a proper job.

timmillea said:

As things stand, my USS pension will be wholly absorbed by means-tested state benefits, i.e. it will be worthless, apart from the meagre lump-sum, at around 8% of the current CETV. 

No, it won't be worthless: it will mean you aren't so dependent on means-tested benefits. Who's to say how drastically they will be cut back in our post-COVID world? If that happened, doubtless you'd be the first to start yapping about poor advice and rushing for the claim form.

Why should the taxpayer support you if you are able to contribute to your own maintenance? You are also overlooking the fact that many benefits are tested against the pension you could draw from a DC arrangement if you chose to do so.  

dunstonh

Short of the quoted 'industry standard minimum' £5,000 fee for FCA-compliant advice - which amounts to almost 12% of the entire CETV. I refuse to be a victim of the next financial mis-selling scandal.

£5000 is not industry standard.  However, it is in the ballpark of what you expect to see for a reasonable fee.  Yet you seem to want to be a victim.

I have studied FCA ps20-06 (new regs coming in 1st October) and there is not one mention of means tested benefits, Pension Credit or the like. It is a document regulating the rich industry interested only in rich clients.

Generally, you have to have a fair bit of alternative wealth to be able to afford to transfer out of a DB scheme.   So, that is not unexpected.

As things stand, my USS pension will be wholly absorbed by means-tested state benefits, i.e. it will be worthless

That isnt how means tested benefits work.   And transferring the pension will not prevent the DC pension from being included in the means test.

As the CETV is over £30k, I am required by law to obtain advice to transfer, even though I know the narrow FCA regulations are not to.

Historically, 9 out of 10 people are best left in the DB scheme and not transferred.   That figure has changed in recent times due to low gilt yields but it is corect that most people are best staying put.    It is possible to argue that the FCA is a bit out of touch with some of its views but it is not unreasonable position.

I am in the position of having to surrender 12% of my pension to an adviser who I will ignore and then have a very limited selection of schemes who are prepared to receive a transfer without positive advice.

Which just indicates how much of a risk you are asking all of them to take.

The FCA seems to swap one mis-selling scandal for another yet always protects the financial professionals.

The FCA are trying to prevent a scandal.   And it certainly does not protect financial professionals.   Many are going out of business or suffering massive costs just to keep going.  Even those that have never transacted in DB pension transfers are suffering massive cost increases.

bigadaj

timmillea said:

I am 18 months off being 55. I have tried for 3 years - every time the 3 months 'free transfer window' opens - to transfer my small (£36 pw at age 67) DB Universities Superannuation Scheme pension to a DC pension, without success. Short of the quoted 'industry standard minimum' £5,000 fee for FCA-compliant advice - which amounts to almost 12% of the entire CETV. I refuse to be a victim of the next financial mis-selling scandal.

I have studied FCA ps20-06 (new regs coming in 1st October) and there is not one mention of means tested benefits, Pension Credit or the like. It is a document regulating the rich industry interested only in rich clients.

As things stand, my USS pension will be wholly absorbed by means-tested state benefits, i.e. it will be worthless, apart from the meagre lump-sum, at around 8% of the current CETV. The FCA regulations to FAs are for me to lose 92% of the value of my pension and have plenty of calculations and tables to show why this is right and I am wrong. Ther is no discussion possible with them except to explain to me in idiot terms why I am wrong and that state benefits are not relevant. 

As the CETV is over £30k, I am required by law to obtain advice to transfer, even though I know the narrow FCA regulations are not to. 

I am in the position of having to surrender 12% of my pension to an adviser who I will ignore and then have a very limited selection of schemes who are prepared to receive a transfer without positive advice. 

The FCA seems to swap one mis-selling scandal for another yet always protects the financial professionals.

Exhausted this season and I only have one season left.. It has been a very long 3 months. Any creative ideas would be most welcome.

So what plans do you have for this sum should you be able to get your mitts on it? Presumably you want then to live off benefits until you pop your clogs? 

xylophone

Are you sure that you would be in line for pension credit anyway?
Have you obtained a state pension forecast?
https://www.gov.uk/check-state-pension

Sebo027

timmillea said:

I am 18 months off being 55. I have tried for 3 years - every time the 3 months 'free transfer window' opens - to transfer my small (£36 pw at age 67) DB Universities Superannuation Scheme pension to a DC pension, without success. Short of the quoted 'industry standard minimum' £5,000 fee for FCA-compliant advice - which amounts to almost 12% of the entire CETV. I refuse to be a victim of the next financial mis-selling scandal.

I have studied FCA ps20-06 (new regs coming in 1st October) and there is not one mention of means tested benefits, Pension Credit or the like. It is a document regulating the rich industry interested only in rich clients.

As things stand, my USS pension will be wholly absorbed by means-tested state benefits, i.e. it will be worthless, apart from the meagre lump-sum, at around 8% of the current CETV. The FCA regulations to FAs are for me to lose 92% of the value of my pension and have plenty of calculations and tables to show why this is right and I am wrong. Ther is no discussion possible with them except to explain to me in idiot terms why I am wrong and that state benefits are not relevant. 

As the CETV is over £30k, I am required by law to obtain advice to transfer, even though I know the narrow FCA regulations are not to. 

I am in the position of having to surrender 12% of my pension to an adviser who I will ignore and then have a very limited selection of schemes who are prepared to receive a transfer without positive advice. 

The FCA seems to swap one mis-selling scandal for another yet always protects the financial professionals.

Exhausted this season and I only have one season left.. It has been a very long 3 months. Any creative ideas would be most welcome.

I might be missing something but to ask the obvious - why can't you find another adviser to give you FCA compliant advice at less than £5k? 

And second, even if you have to pay the £5k, according to your calculations, isn't that still worth it to get your money out if the alternative is leaving it in?