Transfer Defined Benefit Pension & the great suitability report ripoff

Linton

ZingPowZing said:

Thank you for the link. Where it states:
       Provisions in the Pension Schemes Act ensure that the new flexibilities operate as intended. These include:

• new safeguards to support individuals if they wish to transfer out of their existing Defined Benefit scheme to access the new flexibilities. 

If there is a provision that contradicts the above, it has eluded me on first reading.

I think you highlighted the wrong word.  The important word is "safeguards".  The safeguards support the individuals who wish to transfer by helping ensure that they dont do something that is not in their best interests.

[Deleted User]

Linton said:

ZingPowZing said:

Thank you for the link. Where it states:
       Provisions in the Pension Schemes Act ensure that the new flexibilities operate as intended. These include:

• new safeguards to support individuals if they wish to transfer out of their existing Defined Benefit scheme to access the new flexibilities. 

If there is a provision that contradicts the above, it has eluded me on first reading.

I think you highlighted the wrong word.  The important word is "safeguards".  The safeguards support the individuals who wish to transfer by helping ensure that they dont do something that is not in their best interests.

But the law is that the final choice belongs to the individual. That's the spirit of the Act.
And the "safeguards" clearly failed for a very obvious reason.

Linton

ZingPowZing said:

Linton said:

ZingPowZing said:

Thank you for the link. Where it states:
       Provisions in the Pension Schemes Act ensure that the new flexibilities operate as intended. These include:

• new safeguards to support individuals if they wish to transfer out of their existing Defined Benefit scheme to access the new flexibilities. 

If there is a provision that contradicts the above, it has eluded me on first reading.

I think you highlighted the wrong word.  The important word is "safeguards".  The safeguards support the individuals who wish to transfer by helping ensure that they dont do something that is not in their best interests.

But the law is that the final choice belongs to the individual. That's the spirit of the Act.
And the "safeguards" clearly failed for a very obvious reason.

Yes but investment safeguards include compensation for bad advice.  Who pays?  When one is dealing with £n00Ks of pension the costs could be considerable.   The FCA have a history of strongly favouring the customer.  For example I remember there was one case where someone transferred their pension against advice, invested in something stupid and lost it.  The FCA awarded compensation against the advisor because the advice not to transfer wasnt strong enough.

Under those sort of circumstances it is obvious why most IFAs and most platforms are avoiding getting anywhere near the firing line and why the costs of advice are expensive.

[Deleted User]

An avalanche of compensation claims await.. But it won't come from people like the OP imo.
It will come, in five or ten years, from people guided by their Advisers to invest in True Potential (and their ilk) and also signed up for ongoing advice. 

Thrugelmir

ZingPowZing said:

An avalanche of compensation claims await.. But it won't come from people like the OP imo.
It will come, in five or ten years, from people guided by their Advisers to invest in True Potential (and their ilk) and also signed up for ongoing advice. 

Or simply those that mismanage their investments. When they realise investing in markets isn't paved in gold. 

[Deleted User]

Thrugelmir said:

ZingPowZing said:

An avalanche of compensation claims await.. But it won't come from people like the OP imo.
It will come, in five or ten years, from people guided by their Advisers to invest in True Potential (and their ilk) and also signed up for ongoing advice. 

Or simply those that mismanage their investments. When they realise investing in markets isn't paved in gold. 

I take it you mean people like me, Thrugelmir.

Short answer No. 

People who pushed/ insisted on a transfer to take charge of their fortune over the last few years have already realised significant gains; the best possible defence against a significant downturn. 

In principle we have no redress; we can easily buy back the benefits we gave up.

The avalanche of future claims will come from the group who were sleepwalked out of their DB pensions by advisers serving their own interest.

AlanP_2

ZingPowZing said:

Thrugelmir said:

ZingPowZing said:

An avalanche of compensation claims await.. But it won't come from people like the OP imo.
It will come, in five or ten years, from people guided by their Advisers to invest in True Potential (and their ilk) and also signed up for ongoing advice. 

Or simply those that mismanage their investments. When they realise investing in markets isn't paved in gold. 

I take it you mean people like me, Thrugelmir.

Short answer No. 

People who pushed/ insisted on a transfer to take charge of their fortune over the last few years have already realised significant gains; the best possible defence against a significant downturn. 

In principle we have no redress; we can easily buy back the benefits we gave up.

The avalanche of future claims will come from the group who were sleepwalked out of their DB pensions by advisers serving their own interest.

You, and many others may have realised significant gains, but many are likely to have invested in low risk assets and / or cash and /or have withdrawn too much, too fast.

They will be the ones that the legal ambulance chasers will be after, not those who have invested in a suitable offering (for their risk / attitude / situation) advised by an IFA.

Thrugelmir

ZingPowZing said:

Thrugelmir said:

ZingPowZing said:

An avalanche of compensation claims await.. But it won't come from people like the OP imo.
It will come, in five or ten years, from people guided by their Advisers to invest in True Potential (and their ilk) and also signed up for ongoing advice. 

Or simply those that mismanage their investments. When they realise investing in markets isn't paved in gold. 

I take it you mean people like me, Thrugelmir.

Not addressing at anyone in particular. Unfortunately there'll be losers. That's the nature of investing.  If making money were that easy no one would need a day job. 

nsmorgan53

I have had the exact same problem as the original post.  I need to transfer a relatively small (£40k) pot from a DB scheme into a SIPP.  The DB pension is not a good one and pays a trivial amount.  All the IFAs I have spoken simply reiterate everything I already know and want to charge a fortune.  I started talking to my MP last year about getting the law changed (increase the threshold to £50k) and was getting somewhere until BREXIT/election and COVID came along.  I also communicated with a member of the House of Lords.  There is actually awareness and sympathy in the House of Commons and the Lords on this issue.  We need to get the legislation changed to either increase the threshold or allow some form of waiver/indemnity for those who have an understanding of the benefits of asset based pension investment.  I am considering starting another thread with the sole purpose of lobbying MPs to update this now obsolete legislation.  If anyone is interested, please let me know.

[Deleted User]

Good idea. The FCA published this in Aug '19:

As well as addressing contingent charging, the FCA is consulting on other measures to change how advisers manage and deliver pension transfer advice. These include introducing abridged advice so that firms can deliver low cost advice to customers who should not transfer,

Hard to detect much enthusiasm among financial advisers for that initiative, though.