Financial advice

[Deleted User]

garmeg said:

dunstonh said:

FGdsa21 said:

jamesd those figures are for a level annuity, and like I said previously approx £150 per annum guaranteed benifit.
So taking financial advice to have control of taking lump sums rather than annuity will prove to be as previous posts have said a £1,000 cost for a signed letter from a financial advisor versus losing £150 a year benefit!!! 

That assumes you find an IFA willing. Overriding a GAR is something that PI insurers ask advisers if they have done it  and request case specific details each year (cumulatively).  Many would consider not offering advice at all rather than put up with that hassle and the increased annual premiums that come with it.      Then you have insistent client data that gets requested as well.  Chances are this case would fall foul of both.   So, good chance an IFA would say thank you but no thanks.

A bit mean to be in this situation due to what is really a crap GAR.

Assume you didn't pass the IFA traineeship, garmeg.

dunstonh

garmeg said:

dunstonh said:

FGdsa21 said:

jamesd those figures are for a level annuity, and like I said previously approx £150 per annum guaranteed benifit.
So taking financial advice to have control of taking lump sums rather than annuity will prove to be as previous posts have said a £1,000 cost for a signed letter from a financial advisor versus losing £150 a year benefit!!! 

That assumes you find an IFA willing. Overriding a GAR is something that PI insurers ask advisers if they have done it  and request case specific details each year (cumulatively).  Many would consider not offering advice at all rather than put up with that hassle and the increased annual premiums that come with it.      Then you have insistent client data that gets requested as well.  Chances are this case would fall foul of both.   So, good chance an IFA would say thank you but no thanks.

A bit mean to be in this situation due to what is really a crap GAR.

He will get someone.  Its just going to be a choice of not interested, pay through the nose for it or find someone who cant afford to pick and choose their clients.
IFAs don't want these types of transactions.  So, don't blame us.   An unwilling client being forced into something they don't want and an IFA doing something they dont really want is not an ideal scenario.

jamesd

garmeg said:

A bit mean to be in this situation due to what is really a crap GAR.

Blame the House of Commons committee that handles this area. The original pension freedoms didn't have an advice requirement.

The result of that change is the FCA still having a role and trying to make advised transfers too expensive for people to afford them, as a deliberate plan to reduce the number. A side effect of that is  making earlier transfers cheaper so providing a financial incentive, if % rather than fixed fee is charged, for that when waiting longer in say a DB scheme may be a better plan.

Time for a redo that again gets the FCA out of the picture unless people choose advice.

garmeg

dunstonh said:

garmeg said:

dunstonh said:

FGdsa21 said:

jamesd those figures are for a level annuity, and like I said previously approx £150 per annum guaranteed benifit.
So taking financial advice to have control of taking lump sums rather than annuity will prove to be as previous posts have said a £1,000 cost for a signed letter from a financial advisor versus losing £150 a year benefit!!! 

That assumes you find an IFA willing. Overriding a GAR is something that PI insurers ask advisers if they have done it  and request case specific details each year (cumulatively).  Many would consider not offering advice at all rather than put up with that hassle and the increased annual premiums that come with it.      Then you have insistent client data that gets requested as well.  Chances are this case would fall foul of both.   So, good chance an IFA would say thank you but no thanks.

A bit mean to be in this situation due to what is really a crap GAR.

He will get someone.  Its just going to be a choice of not interested, pay through the nose for it or find someone who cant afford to pick and choose their clients.
IFAs don't want these types of transactions.  So, don't blame us.   An unwilling client being forced into something they don't want and an IFA doing something they dont really want is not an ideal scenario.

I am not blaming IFAs here.

I am blaming the crap GAR which is not really of much value.

Normally you see a GAR of 8% or even 12% which is of value.

A GAR under 5% is not of much value and just causes issues like this.

Of course if rates edge up slightly, the GAR may no longer 'bite' and the problem may go away.

Some companies did allow some customers to give up their GAR a few years  ago, without the need for advice, in return for a higher fund (and transfer) value - some of the Phoenix Life companies I think.

garmeg

jamesd said:

garmeg said:

A bit mean to be in this situation due to what is really a crap GAR.

Blame the House of Commons committee that handles this area. The original pension freedoms didn't have an advice requirement.

The result of that change is the FCA still having a role and trying to make advised transfers too expensive for people to afford them, as a deliberate plan to reduce the number. A side effect of that is  making earlier transfers cheaper so providing a financial incentive, if % rather than fixed fee is charged, for that when waiting longer in say a DB scheme may be a better plan.

Time for a redo that again gets the FCA out of the picture unless people choose advice.

I wasn't blaming anyone. Maybe the pension provider for a crap GAR which would have been well 'out of the money' when the policy was written.

This is not a DB scheme. It mentions a GAR so it looks like a conventional with profits policy (money purchase, DC) with a very poor GAR.

garmeg

ZingPowZing said:

garmeg said:

dunstonh said:

FGdsa21 said:

jamesd those figures are for a level annuity, and like I said previously approx £150 per annum guaranteed benifit.
So taking financial advice to have control of taking lump sums rather than annuity will prove to be as previous posts have said a £1,000 cost for a signed letter from a financial advisor versus losing £150 a year benefit!!! 

That assumes you find an IFA willing. Overriding a GAR is something that PI insurers ask advisers if they have done it  and request case specific details each year (cumulatively).  Many would consider not offering advice at all rather than put up with that hassle and the increased annual premiums that come with it.      Then you have insistent client data that gets requested as well.  Chances are this case would fall foul of both.   So, good chance an IFA would say thank you but no thanks.

A bit mean to be in this situation due to what is really a crap GAR.

Assume you didn't pass the IFA traineeship, garmeg.

Assume you did pay Hargreaves Lansdown for their, not free, advice in the end?

[Deleted User]

garmeg said:

ZingPowZing said:

garmeg said:

dunstonh said:

FGdsa21 said:

jamesd those figures are for a level annuity, and like I said previously approx £150 per annum guaranteed benifit.
So taking financial advice to have control of taking lump sums rather than annuity will prove to be as previous posts have said a £1,000 cost for a signed letter from a financial advisor versus losing £150 a year benefit!!! 

That assumes you find an IFA willing. Overriding a GAR is something that PI insurers ask advisers if they have done it  and request case specific details each year (cumulatively).  Many would consider not offering advice at all rather than put up with that hassle and the increased annual premiums that come with it.      Then you have insistent client data that gets requested as well.  Chances are this case would fall foul of both.   So, good chance an IFA would say thank you but no thanks.

A bit mean to be in this situation due to what is really a crap GAR.

Assume you didn't pass the IFA traineeship, garmeg.

Assume you did pay Hargreaves Lansdown for their, not free, advice in the end?

Every penny.
Would have cost thirty times more to have followed their recommendation. So, swings and roundabouts, garmeg.

garmeg

ZingPowZing said:

garmeg said:

ZingPowZing said:

garmeg said:

dunstonh said:

FGdsa21 said:

jamesd those figures are for a level annuity, and like I said previously approx £150 per annum guaranteed benifit.
So taking financial advice to have control of taking lump sums rather than annuity will prove to be as previous posts have said a £1,000 cost for a signed letter from a financial advisor versus losing £150 a year benefit!!! 

That assumes you find an IFA willing. Overriding a GAR is something that PI insurers ask advisers if they have done it  and request case specific details each year (cumulatively).  Many would consider not offering advice at all rather than put up with that hassle and the increased annual premiums that come with it.      Then you have insistent client data that gets requested as well.  Chances are this case would fall foul of both.   So, good chance an IFA would say thank you but no thanks.

A bit mean to be in this situation due to what is really a crap GAR.

Assume you didn't pass the IFA traineeship, garmeg.

Assume you did pay Hargreaves Lansdown for their, not free, advice in the end?

Every penny.
Would have cost thirty times more to have followed their recommendation. So, swings and roundabouts, garmeg.

Did the money come from your pension (ouch) or taxed funds (more ouch)?

[Deleted User]

garmeg said:

ZingPowZing said:

garmeg said:

ZingPowZing said:

garmeg said:

dunstonh said:

FGdsa21 said:

jamesd those figures are for a level annuity, and like I said previously approx £150 per annum guaranteed benifit.
So taking financial advice to have control of taking lump sums rather than annuity will prove to be as previous posts have said a £1,000 cost for a signed letter from a financial advisor versus losing £150 a year benefit!!! 

That assumes you find an IFA willing. Overriding a GAR is something that PI insurers ask advisers if they have done it  and request case specific details each year (cumulatively).  Many would consider not offering advice at all rather than put up with that hassle and the increased annual premiums that come with it.      Then you have insistent client data that gets requested as well.  Chances are this case would fall foul of both.   So, good chance an IFA would say thank you but no thanks.

A bit mean to be in this situation due to what is really a crap GAR.

Assume you didn't pass the IFA traineeship, garmeg.

Assume you did pay Hargreaves Lansdown for their, not free, advice in the end?

Every penny.
Would have cost thirty times more to have followed their recommendation. So, swings and roundabouts, garmeg.

Did the money come from your pension (ouch) or taxed funds (more ouch)?

So may it please you, garmeg, it came from my bank account. 
The real damage in many cases, I believe, will be the legacy of self-serving advice. 

Malthusian

Assuming that the guaranteed annuity really is as uninspiring as posted (i.e. the OP isn't mistaken that it's level and not index-linked), this may be one of those cases where the insurer has boosted the pot value in the hope of getting it off their books.

For some policies the guarantee is to pay a certain amount as an annuity, not to use a certain percentage rate. In these cases, if the insurer increases the transfer value, but the policyholder looks at the percentage of the guaranteed annuity, it can appear that the insurer is being less generous when it is actually the opposite. The contractual benefit is the guaranteed annuity which the policyholder is still getting, and on top of that they are getting a more generous transfer value.

If it's this kind of policy, the OP could have been offered a transfer value of say £35,000 and they'd be delighted at having a generous guaranteed annuity rate of 7%. But they're being offered £23,000 more than that so they're !!!!!! off that they'll have to pay an advice fee out of that £23,000 if they wanted to put it in drawdown. (Which they wouldn't have considered if the transfer value was lower.)

Note that this is very hypothetical. The OP might be about to tell us that the transfer value of the pension has been around £58,000 since the year dot (even before 2010 when interest rates were higher) in which case none of the above applies, it's just a crap GAR, and they really have been unfortunate to be caught by the blunt instrument of the advice requirement.