Defined Benefit Transfer

Icarus001

I’m shocked at the fees and seemingly unregulated charges - I was quoted 16k upfront to get secondary advice to try and get my pot transferred to a SIPP
I needed secondary advice because my first financial advisor tried to sell me a low return annuity, for which he would have got 26k had I gone ahead! Whilst I’m still working and paying 40% tax  He will not review his advice to a SIPP which is my preference, as I suppose he gets no benefit from.   If you have DB pension, and want to transfer it to a SIPP you must have specific advice nominated to the platform SIPP provider eg Vanguard..   That’s a joke as you can’t guarantee the outcome of the advice will be that specific to a SIPP provider.  If it was DC pension without guarantees it’s no problem.  It’s discrimination that you are blocked this way from making your own choices - like you’re some kind idiot.  The regulations say you must take financial advice (which I’ve done and paid for) but now you have to start all over again - pay a huge fee up front and hope the advisor gives you positive advice as to what you want to do... I tried 15 platforms and all said the same that without positive FA advice nominated to their platform they would not receive my pension pot.  It’s their policy!!! They all said the same thing - It seems the Pension is theirs and not mine to decide on.  how can the regulator allow this?  Its my money and my choice, clearly not!  The regulator should sort this mess out - it’s not surprising people get scammed - this behaviour is forcing people like me to find a way through this problem as cheaply as possible.  Has anyone found a solution to this..?

p00hsticks

The common advice on here is that AJ Bell will accept DB transfers from insistent clients (i.e.ones where advice has been paid for but the advice is not to transfer).  

dunstonh

I’m shocked at the fees and seemingly unregulated charges - I was quoted 16k upfront to get secondary advice to try and get my pot transferred to a SIPP

£16k is high.  More typically its around £3000-£5000.  And the industry is regulated. 

I needed secondary advice because my first financial advisor tried to sell me a low return annuity, for which he would have got 26k had I gone ahead!

Annuity sales via advisers on an advised basis are free based.    Not commission based.     You could easily see a non-advised commission sale hit £26k but not an advised case.  (commission wouldn't need a fee agreement.   Fee would and I cant see a fee agreement stating £26,000 being signed by anyone).

Whilst I’m still working and paying 40% tax  He will not review his advice to a SIPP which is my preference, as I suppose he gets no benefit from.  

Fees agreed are paid regardless of where it goes.

 That’s a joke as you can’t guarantee the outcome of the advice will be that specific to a SIPP provider.  

It doesnt need to be specific to a provider.   

It’s discrimination that you are blocked this way from making your own choices - like you’re some kind idiot.

Most people dont know what they are doing and historically, 9 out of 10 DB schemes are best left where they are.

 The regulations say you must take financial advice (which I’ve done and paid for) but now you have to start all over again - pay a huge fee up front and hope the advisor gives you positive advice as to what you want to do.

Why do you think you need to do that?  You don't.   The adviser is required to sign any declaration that they have given advice, providing that the provider is not asking the adviser to accept liability for the transfer.

 I tried 15 platforms and all said the same that without positive FA advice nominated to their platform they would not receive my pension pot.  It’s their policy!!! 

Which is a reasonable risk decision.  They dont want you suing them for making the mistake of transferring your pension.

They all said the same thing - It seems the Pension is theirs and not mine to decide on.  

It if their choice to accept your business or not.  It is not your choice.

how can the regulator allow this?

The regulator is the cause.

 Its my money and my choice, clearly not!

Its not your money technically.  

Has anyone found a solution to this..?

Yes.  Lots of people have.

xylophone

It seems that you have a DB pension valued at over £30,000.

You want to move it to a DC scheme.

You require the advice of a Pension Transfer Specialist for which you must pay.

If the advice is not to transfer this does not prevent your transferring - the  Trustees of the ceding scheme require confirmation that the advice has been received, not whether it was positive or negative.

With regard to a receiving scheme, not all will accept a transfer unless the advice was positive.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/transfer-pension-scheme/

However, although most schemes provide the right to transfer, not every scheme has to accept an incoming transfer.

A stakeholder pension scheme is currently the only type of scheme which must accept any transfer from another registered pension scheme.

AJ Bell has been mentioned on the forum as a provider that will accept a DB pension regardless of whether the advice was positive or negative.

https://adviserbook.co.uk/ might be worth a look - you would tick "confirmed independent" and "pension transfer" when the menu comes up.

Icarus001

Thank you, I’ll try again.  I’ve been trying for almost a year.  It’s very very frustrating, and I understand in most cases it’s not a good idea to give up long term benefits. It should be a mapped route with key checks along the way and cool off periods, this hit and miss and petrified of being sued “state of affairs” needs clearing up, for everyone’s sake.

Albermarle

The subject comes up ( very ) regularly on this forum .
Final Salary Transfer Out - Can anyone recommend a company? — MoneySavingExpert Forum
Transferring old workplace pension into a SIPP — MoneySavingExpert Forum
DB Pension transfer - Cheapest advice.....? — MoneySavingExpert Forum
By the way some of the regulations are actually to stop people getting scammed . Many poor souls have transferred from good guaranteed final salary schemes into less stable investment led schemes and have come a cropper.
The SIPP providers will not accept a transfer with a negative recommendation, as they are scared that 10 years down the line the client will have blown all the money and try to sue them.

Marcon

Icarus001 said:

If you have DB pension, and want to transfer it to a SIPP you must have specific advice nominated to the platform SIPP provider eg Vanguard..  

No, you need to demonstrate to the DB scheme that you have received advice (you don't have to follow it, nor does the DB scheme need or want to know what the advice was).

You can then transfer to any scheme which will accept the transfer. AJ Bell are currently the only SIPP willing to do so without a positive recommendation to transfer out.

Stakeholder pensions are required by law to accept any transfer from a UK-registered pension scheme, so once you've got your advice (to satisfy the DB scheme that you've received it), transfer to a stakeholder and you can then transfer to a much wider choice of SIPPs, because it will be a DC to DC transfer.

[Deleted User]

It is a very bad system. 
Perhaps the worst aspect is the fallibility of the advice and recommendation itself.
Historically, adviser-greed has helped two-thirds of transfers to a recommendation to transfer but now adviser-fear is dominant and it’s safer to make a negative recommendation when the fee is guaranteed.

JoeCrystal

Icarus001 said:

Thank you, I’ll try again.  I’ve been trying for almost a year.  It’s very very frustrating, and I understand in most cases it’s not a good idea to give up long term benefits. It should be a mapped route with key checks along the way and cool off periods, this hit and miss and petrified of being sued “state of affairs” needs clearing up, for everyone’s sake.

It may be that the reason why you are quoted so high the amount is that they really do not want your business as a passive blocker?

Thrugelmir

Icarus001 said:

this hit and miss and petrified of being sued “state of affairs” needs clearing up, for everyone’s sake.

You'll be the first to be knocking on the claim door when things go wrong. You'll recollection of events will be that you were pressurised/ mis-sold by the advisor.  The advisor meanwhile will be long gone living in a nice villa in a faraway land. Leaving the insurance company to rectify your loss and putting you back in the position you would have been if you hadn't transferred.  Jam today or jam tomorrow.  So easily turns peoples heads. Coupled with an extended bull market that makes investing seem so easy. What possibly could go wrong. 

Icarus001

I just think Advisors should be made to declare their gains regardless - I know that technically the advisor’s gains are not paid directly from the clients pension pot that’s being used to purchase the annuity. Which means means the advisor can claim they have no commission.  But the annuities business pays a % of the value to the advisors - which has to have impact on the annuity amount offered to the client.  Which means it has to be paid for with a reduced client annuity payment.  I think that should be declared from the off - any remuneration made to a transacted annuity should be up front and not and paid without the client being aware - it’s obviously designed to allow advisor to state they don’t get a commission- when in fact they do but indirectly, and called something else. 

I’m happy to sign any declaration to waiver my rights  - it’s got nothing to do the jam today and temptations.  Not everyone needs nanny protection from advisors who can’t be upfront about financial gains linked to recommendations.  The DB pension market is full of paranoia and distrust.  That needs clearing up, and as with any advice it’s only right on the day.  Bad advice with incentive gains are and should be made accountable from the advisor.