Transfer Defined Benefit Pension & the great suitability report ripoff

Thrugelmir

Natalius said:

The thing is I have worked in the finance industry for over 30 years ,

Yet have never heard of professional indemnity insurance nor capital adequacy requirements. 

ukdw

I agree that 1% or £3k would be alot for annual charges - but for a one off charge they both sounds pretty reasonable based on other charges quoted on this forum.   Assuming you are going to invest the £170k it could easily move by more than that amount every few days.    93x certainly sounds like a very high multiple, which personally I wouldn't let £3k put me off investigating further.

Note also that the suitability investigation process can sometimes take nearly all of the 3 months CETV guarantee period - so I wouldn't spend too long searching for the cheapest advisor.

Brynsam

Endless threads on this. Instead of ranting pointlessly (and ignorantly), read some of those.

If the CETV is x93, it's wrong.

DairyQueen

Ho hum.... here we go again...

Dontcha just love yet another "I want 'my DB pot'.... and I am not going to pay the going advice rate... and I know what I am doing... and IFAs are rip-off merchants...blah de blah" rant. 

How many has it been so far this month? Too many.

"I shall scweam and scweam until I'm sick" won't get you very far with the IFA community.

30 years in the finance industry? Doing what exactly? Not pensions, apparently.

There are dozens (hundreds?) of similar threads on here OP. The experts here are asked the same questions from DB transfer ranters over-and-over and they repeat the same responses. They have the patience of saints but I am pretty sick of reading the same-old threads from those too lazy to use the search facility.

Recommendations aren't allowed, and nor is advice, but I will happily give you the benefit of my experience (having been through the process) if you are able to provide any reason why you think that this transfer will be in your best interests, and if you are able provide the information already requested on your DB benefits/values.

A multiple of 93 doesn't make sense, and if doesn't make sense then it isn't true. Of course, having been in the finance industry for multiple decades you should know this. If you aren't able to do the basics (i.e. understand the benefits of your DB scheme) then why on earth do you think you are sufficiently knowledgeable to make an informed decision?

Marcon

Natalius said:

 all they do is load your data into a computer programme as they know all the rules/benefits of the various pension companies as they have done suitability reports for those pension funds before.   By that I mean that if my pension was with Nat West then if they have done a suitability report with Nat West before all they do is change the data.  Yes there may be the variation of personal circumstances  but its not hundreds of hours work . Furthermore charging a % is outrageous. What difference does it make if the pension transfer value is £100,000 or £1,000,000. They are not doing 10 times as much work for  the report on the bigger transfer value. 

The thing is I have worked in the finance industry for over 30 years , I know exactly what I am doing and I cannot find anyone that will do this suitability report for a sensible fee.
? I will NOT pay more than 1 %.

Once I'd stopped laughing at your total naivety - 'I know exactly what I'm doing' - I thought you might like to increase your knowledge by looking at this: https://www.fca.org.uk/consumers/defined-benefit-pension-transfers/advice-checker

Then read back on some of the other posts explaining about PI. Not sure you've ever heard of it, so worth reading now.

Your CETV figure is wrong by the sound of it - and if you will NOT (ooh, the anguish!) pay more than 1%, you won't be transferring, so it doesn't matter.

dunstonh

The thing is I have worked in the finance industry for over 30 years , I know exactly what I am doing and I cannot find anyone that will do this suitability report for a sensible fee.

Were you the tea lady for the bank branch canteen?

[Deleted User]

You could try Pensionhelp but they will charge a flat £3,000 if they take it on.  A couple of posters have vouched for the service.
https://forums.moneysavingexpert.com/discussion/6189721/anyone-dealt-with-this-company/p1

HappyHarry

Oh my, someone  behind has been in the business for thirty years and yet believes :
"Why are we being ripped off and please don't tell me a lot of work goes into this as all they do is load your data into a computer programme as they know all the rules/benefits of the various pension companies as they have done suitability reports for those pension funds before.  "

As a pension transfer specialist myself, I can assure you that this isn't what happens, and in reality a tremendous amount of work goes into a pension transfer recommendation. You would know this if you had worked close to the advice sector at all.

If thirty years of experience hasn't taught you this, it would me wonder about what else you don't know, and whether you are actually competent enough to have analysed your situation and come to a sensible conclusion. 

"For the record the pension has a transfer value of £170,620.44  and pays £1,830.00 a year.  At a transfer multiple of 93 times there is no way I am not taking this."

Really? I suspect you have misunderstood something, that does not sound right at all. Again, I suspect, despite your 30 years of experience, that your grasp of this area is somewhat lacking. 

Maybe that fee would be worth you paying after all, if not at least to enable you to make a sensible decision with some real values?

jamesd

Natalius said:

My issue ... its being able to get  the transfer suitability report done for a reasonable sum of money. 

Regrettably the FCA has made this a hostile area for advisers to do work in and this shows up in their expenses and the amount of work they have to do.

You might seek firms in lower living cost area in the north and west of the country.

Firms aren't required to sell to you so providing a summary of why the transfer is worthwhile for you could be helpful: "I've less than six months to live and the DB scheme pays no death benefits to support my family" would make it very clear that a transfer is likely to be advised.

If you want to know who to blame, it's the House of Commons committee that asked for an advice requirement. The original pension freedoms proposals didn't have an advice requirement. This leaves you with only unsatisfactory choices.

Natalius said:

Then you have the firms that charge a lower percentage only if you transfer the pension into one of their managed pension funds.

If a firm has said this to you after 1 October 2020 you might want to let the FCA know. New rules intended to stop such things now apply and in effect:

1. ban charging more or anything for advice to transfer than for advice not to transfer (contingent charging)
2. ban taking the advice charge from the transferred pot
3. ban cross-subsidy from future earnings
4. require the cost to be no lower than the firm would charge for fund allocation advice
5. ban hourly charging that relates cost to work done

The FCA was explicit in saying that their intent was to reduce the number of transfers by making them too expensive.

The changes also introduced something called "Abridged Advice" that is of no value to most potential transferrers who post here because it doesn't satisfy the requirement to get advice before a transfer. The only permitted answers are don't transfer (and you must now also buy full advice to continue)  or you need full advice (which you now must buy to continue). It's more a reflection of the FCA's own strong bias against transfers than a useful product.

Natalius said:

I hear what you suggest but I have the paperwork in front of me. Its in black and white and its pension at date of leaving and GMP age is 60 . Of course once activated it will be index linked etc etc.

It's also at least mostly index linked from the date of leaving. So unless you left this year the multiple is wrong.

The multiple matters in part because it's an important indication of whether and when a transfer is likely to lead to someone being better off. At the lower public sector end of around 16 the key personal facts about life expectancy matter greatly while at today's common private sector values in the 35 or so range anyone who can use a safe withdrawal rate can anticipate a higher income.

Income at pension date also matters because that determines how likely it is that a healthy person will be better off.

ukjoel

"For the record the pension has a transfer value of £170,620.44  and pays £1,830.00 a year.  At a transfer multiple of 93 times there is no way I am not taking this."

Really? I suspect you have misunderstood something, that does not sound right at all. Again, I suspect, despite your 30 years of experience, that your grasp of this area is somewhat lacking. 

I suspect I may understand this or at least offer a guess.  The £1830 a year figure is the amount earned when OP left the company. It may have doubled since then based on inflation. I dont ever receive an update for mine they just say it was worth £6k a year when you left (but goes up with inflation... Mine is now worth nearly 10k and suspect OP may find his is worth nearly 4k or possibly higher. 

This brings CETV closer to a multiple of low 40s which sounds more sensible in current climate especially with a spouse allowance and inflation protection included (which they may be).....
Appreciate there is a fair bit of hypothesis and presumption in the above but I too saw the 93 multiple figure and raised my eyebrows.....