Transferring old workplace pension into a SIPP

ewaste

Dale72 said:

Then this is ethically very suspect. Effectively what the law is saying, is that I need to pay an additional £2200 for full advice knowing that I'm only going to get the same answer.

If it's easier think of it this way, Abridged advice is an unofficial Yes or No initial guidance that isn't legally binding. Full advice goes into more depth and a large portion of the cost is essentially indemnity insurance for the risk that despite the advice being not to transfer you do it anyway and then decide to litigate 20-30 years down the line that the IFA or Pension Trustees didn't do enough to dissuade you but just handed you a bit of paper that said we don't advise this course of action.

Everyone, myself included, likes to say we are adults and that we can live with the decisions we make. Unfortunately we all know that is utter !!!!!!, how many people actually read the small print and think things through before making a decision and then live with it should it be disastrous. We've had endowments, PPI and whatever else over the years. Many people including myself think that DB transfers are likely going to be an issue in future which is very likely to dwarf most financial kerfuffle’s that have come before. This time the regulator is being proactive or at least attempting to mitigate the damage.

dunstonh

Dale72 said:

Then this is ethically very suspect. Effectively what the law is saying, is that I need to pay an additional £2200 for full advice knowing that I'm only going to get the same answer.

Not at all.  You seem to be mixing the service up.  If you are undecided and just want a check to see if it's potentially viable then the abridged option is a lower-cost way to achieve that.    
If you want to transfer the pension irrespective of advice then you would not use the abridged service as it's not aimed at you.

People that use the abridged service and then go onto the full advice service dont pay the full charge on full advice because of the work done so far under abridged.   

Dale72

My situation is that I will be transferring irrespective of the advice given, but obviously if I can do it for £800 rather than £3000 then I'm going to try. Whether abridged advice was made for someone in my position or not, the fact is my IFA has told me that one of the possible outcomes is definitive advice against transferring, that won't change if I take full advice. So how can it be anything other than suspect, for me to HAVE TO take full advice to satisfy the law?

HappyHarry

Dale72 said:

My situation is that I will be transferring irrespective of the advice given, but obviously if I can do it for £800 rather than £3000 then I'm going to try. Whether abridged advice was made for someone in my position or not, the fact is my IFA has told me that one of the possible outcomes is definitive advice against transferring, that won't change if I take full advice. So how can it be anything other than suspect, for me to HAVE TO take full advice to satisfy the law?

The rules, for many years now say that you have to take full advice before transferring a pension with safeguarded benefits. This rule has not changed.

Abridged advice in your situation is a red herring, as it won't help you achieve what you want to achieve. You need to take full advice. If you want to do it cheaply, look for the cheapest full advice you can, and don't get distracted by the offers of a cheap service that won't provide what you require.

Linton

Dale72 said:

My situation is that I will be transferring irrespective of the advice given, but obviously if I can do it for £800 rather than £3000 then I'm going to try. Whether abridged advice was made for someone in my position or not, the fact is my IFA has told me that one of the possible outcomes is definitive advice against transferring, that won't change if I take full advice. So how can it be anything other than suspect, for me to HAVE TO take full advice to satisfy the law?

The advice that is required must come under the regulations - it obviously would defeat the whole object of the legal requirement to have received advice if "advice" could consist of a quick chat  in the pub.  

When an IFA gives you formal advice he is legally liable for that advice.  If it turns out to be inappropriate you can sue the IFA for your resultant losses which could be very high.

You may think that if you go for a transfer against advice then the IFA is safe.   Not so, there was a case a while ago whereby someone did transfer a DB pension against advice and not too surprisingly the results were disastrous.  They sued the IFA and won on the grounds that the IFA's advice not to transfer was not considered to be strong enough.   

Under those circumstances most IFAs dont handle DB transfers and those that do have to pay very large liability insurance charges.  That is why no IFA can give you formal advice on DB transfers for a few £100.

dunstonh

Dale72 said:

My situation is that I will be transferring irrespective of the advice given, but obviously if I can do it for £800 rather than £3000 then I'm going to try. Whether abridged advice was made for someone in my position or not, the fact is my IFA has told me that one of the possible outcomes is definitive advice against transferring, that won't change if I take full advice. So how can it be anything other than suspect, for me to HAVE TO take full advice to satisfy the law?

If you want a vehicle for a family then you eliminate buying a motorbike as its not suitable for you.   You don't moan that the motorbike is unethical because it cannot carry the whole family.  it is not designed for the purpose you want it for.  It is designed for other people who want what the motorbike offers.

You need to stop focusing on a service that is not aimed at you and isn't what you need.

Dale72

Linton, "not too surprisingly the results were disastrous", a big statement to make without knowing anything about me. The fact is I have this pension through working for Halifax Share Dealing, I've been following the markets for 30 years and my current Sipp is 400% up on money paid in. I know past performance etc etc, but that's all I have to go on to tell me this thing is better off with me than with anyone else, or perhaps I should invest in Neil Woodfords next venture?

dunstonh

r perhaps I should invest in Neil Woodfords next venture?

With your history and knowledge and your claims of understanding you would not have invested in Woodford Income as the data was clear as early as 2017 that it used too much in illiquid assets (I pick 2017 as the point the independent research companies were saying not to invest in it).     it is no surprise that most people that got caught out by it relied on marketing rather than research.  Albeit marketing that they thought was research.

The regulatory system is there to try and protect people that know very little.  It can be frustrating to the minority that believe they have the knowledge and ability.

Linton

Dale72 said:

Linton, "not too surprisingly the results were disastrous", a big statement to make without knowing anything about me. The fact is I have this pension through working for Halifax Share Dealing, I've been following the markets for 30 years and my current Sipp is 400% up on money paid in. I know past performance etc etc, but that's all I have to go on to tell me this thing is better off with me than with anyone else, or perhaps I should invest in Neil Woodfords next venture?

I am saying nothing abut you, just giving you some of the background as to why you cant get quick cheap advice that you can simply ignore.  If the transfer goes ahead and turns out badly you would have the right to try and claim compensation. You cannot say or do anything that removes that right.  A right for you means a risk for the IFA that must be paid for.

Croeso69

Linton said:

Dale72 said:

My situation is that I will be transferring irrespective of the advice given, but obviously if I can do it for £800 rather than £3000 then I'm going to try. Whether abridged advice was made for someone in my position or not, the fact is my IFA has told me that one of the possible outcomes is definitive advice against transferring, that won't change if I take full advice. So how can it be anything other than suspect, for me to HAVE TO take full advice to satisfy the law?

The advice that is required must come under the regulations - it obviously would defeat the whole object of the legal requirement to have received advice if "advice" could consist of a quick chat  in the pub.  

When an IFA gives you formal advice he is legally liable for that advice.  If it turns out to be inappropriate you can sue the IFA for your resultant losses which could be very high.

You may think that if you go for a transfer against advice then the IFA is safe.   Not so, there was a case a while ago whereby someone did transfer a DB pension against advice and not too surprisingly the results were disastrous.  They sued the IFA and won on the grounds that the IFA's advice not to transfer was not considered to be strong enough.   

Under those circumstances most IFAs dont handle DB transfers and those that do have to pay very large liability insurance charges.  That is why no IFA can give you formal advice on DB transfers for a few £100.

Do you have the Ombudsman case number for this @Linton as it would be interesting.

Thanks