Transfer Defined Benefit Pension & the great suitability report ripoff

Roygroyg

To OP
I'm also in the NatWest Group pension scheme and my latest CETV is somewhere over 40 times so 93 seems very high. I've had to apply inflation figures to my pension as despite requests the pension scheme will not give me a current value to the pension, just the figure at leaving (I would get over 50 times if I used that and I left this decade). 
Given the annual value is small and the fact they haven't offered DB to new entrants for perhaps 13+ years I'm guessing your figure might be from the nineties or early noughties so inflation adjusting could make a huge difference and give you a more accurate multiple. For a smaller pot they might still be offering better than my 40 times and can definitely see the attraction.

I'm quite keen to do a part (50%) transfer although I am just under 50 and given the current environment for transfers I have largely accepted I should wait a few years until kids are older (and death benefits consequently less)  before reviewing again as could not even get someone to review a transfer (being under 50 seemed a big reason).

The costs do seem high but as IFA's seem to be fleeing this service I doubt it is such a massive moneyspinner with the potential indemnity costs. The amount of calls I am getting about legal action on past investment advice these days is significant and with the regulator advising transfers almost always not in persons interest IFAs are in a precarious position. To me personally I find it very nanny state as manage a larger portfolio already but can see how many people could make the wrong decision if not protected. 

DairyQueen

Roygroyg said:

 To me personally I find it very nanny state as manage a larger portfolio already but can see how many people could make the wrong decision if not protected. 

It seems that OP's lack of knowledge is an exemplar of why the 'nanny state' is intervening.

Pensions freedoms rely on the premise that the individual has a modicum of financial understanding. Minus this, a pensions transfer is fraught with risk for the member and the IFA. The member (dazzled by £££s) hasn't a clue about the benefits they are foregoing and the IFA is carrying the burden of (mis)advising their ignorant but persistent client.

Lose, lose.

If OP wants to rant then she should pick the appropriate target - the government.

Natalius

Some useful answers  and a few people actually helped me out so to those  thank you .   
Whilst some of you might be frustrated that I didn't trawl through the entire forum to seek the answer I was looking for , actually I did a lot of trawling and I couldn't find a specific answer that answered my question . 
I do have over 3 decades  in the finance industry and  yes its NOT in pensions  . However irrespective of  what branch of the finance industry it might be  and contrary to the insults I don't need a microanalysis report  to give me " permission " to be master of my own destiny.  Its MY money and you are NOT going to tell me if I can or can't do this , that or the other. I am not looking to trade insults here, but if you were assured of your recommendation why do you need indemnity insurance ? 
 I have seen so called experts come and go and very few if any make money / do what it says on the tin .  I currently have a " managed " pension pot by some super star ubber qualified  manager specialist in the field. Has more letters after their name than the alphabet .  Guess what, all they have done over the last 5 years is lose money. Are they accountable ,  are they hell. 
I take on board what people are saying about the multiple and adjusting for inflation, and even if you do that the multiple offered is over 50 times. 
As for the issue of fees, and I may well have to direct myself towards the FCA / Government as the most culpable, I still find the fees exorbitant. In essence you will charge me over 1 years Pension benefit  for the report. We all have our own measure of reasonable or value for money. I find the current fees excessive.  Its just my opinion . 
I think to pay £1700 for a report is a lot of money. I know legislation has changed but my colleague had this report done for himself with a transfer value of £550,000 last October for £450.00  Yes I am using that as a yardstick
There certainly is no pricing consistency and I still maintain charging a % instead of a fixed fee is profiteering especially given those fees can come from the Pension pot. 

ROYGROYG.............Your contribution  was well received and thanks for your courtesy .  I think you are spot on with regards to IFA's fleeing the service and the excessive charges being the large indemnity costs. 
Just for the record its NOT a Nat West pension. I am over 50 , my kids are both over the age of 21 and I have 3 other pensions , 2 of which I manage myself. I started doing that 4 years ago after getting fed up with other peoples poor performance.

Lastly, if you are an IFA / Person who does these reports, I get that you may well feel defensive about someone calling you out on what you charge for these reports. Instead of trading insults , feel free to argue your case instead of insulting people.
Thank you to all who  gave me a sensible answer.

NottinghamKnight

That's not much of a mea culpa really. The money isn't yours at the end of the day, you signed up to a scheme that agreed to pay you an agreed sum at a future date, nothing in that regard has changed. Many years later legislation was enacted that gave the possibility that the income could be exchanged for a lump sum, however to do this there had to be an independent report to demonstrate that this would be in your interest. In most circumstances this won't be the case, as you would not be able to get the same guaranteed income commercially under the same terms. PI cover is just a business cost, the premium being set by insurers based on what they deem the risk to be, high risk transactions such as pensions transfers are classes appropriately with high premiums or insurers may often decline to cover. PI insurance is there to cover the customer and is also a legal requirement so you probably need to add insurance companies to your list of those that are stopping you.
It might be helpful if you detailed which part of the financial industry you worked in, as you genuinely don't seem to understand the issues at play here, it would be informative for all and may explain the views you hold.

Thrugelmir

Natalius said:

Lastly, if you are an IFA / Person who does these reports, I get that you may well feel defensive about someone calling you out on what you charge for these reports. Instead of trading insults , feel free to argue your case instead of insulting people.

You'll find that a very large number have already withdrawn from this market. LEBC Group being one such organisation having had their knuckles rapped by the regulator . Plenty of reading on the FCA website if you wish to have a more informed in depth understanding of the topic. 

AnotherJoe

If the OP thinks it's so lucrative perhaps they should ask themselves why are so few IFAs doing it? The answer is it's too much hassle and has too high insurance premiums so for anyone that does do it they charge an arm and a leg since they don't think it's worth doing for £450 (and why does OP not just go to that service?)
And like Dairy Queen I think I've had it with the ranty posts on this subject, especially since the ill informed ranters will not listen to reason, they made their minds up already well before they asked the question. 

Though in passing I wonder why someone in finance for 30 years has been managing his pension for just four, I'm not in finance yet  ive been managing mine for 20 ! I'm not impressed how long it took the penny to drop for OP, I suspect it will take as long re DBs 

And I'm signing off on this subject 

DairyQueen

AnotherJoe said:

And I'm signing off on this subject 

Me too, and for the same reasons.

Albermarle

The money isn't yours at the end of the day, you signed up to a scheme that agreed to pay you an agreed sum at a future date, nothing in that regard has changed.

This is the critical point that many people complaining about DB transfers seem to  not understand .

They joined an employer with a DB scheme, and that DB scheme will pay out a pension as detailed in the pension scheme rules. So they have not lost anything . The fact that the scheme is offering to buy them out so they can dump the liability is almost a secondary issue.. For sure it does not mean the money is theirs . In fact with almost all DB schemes by far the majority of the money that goes into the scheme does NOT come from the employee in the first place. 

Joey_Soap

Myself, I am very happy to see the system is working quite well to protect people from their own mistakes. It is quite correct that the presumption in DB to DC transfers should be that it's a bad idea in all but exceptional circumstances. Without this safeguarding, we'll see the same people ranting about how the industry robbed them of their final salary pension benefits in a few years time.

[Deleted User]

NottinghamKnight said:

The money is yours at the end of the day, you signed up to a scheme that agreed to pay you an agreed sum at a future date. Many years later legislation was enacted that gave the possibility that the income could be exchanged for a lump sum, however to do this there had to be an independent report.. 

There, fixed that for you.

Strong turnout from the Financial Adviser Apologist team though.