Defined Benefit Transfer

HappyHarry

You will be pleased to know that advisers must be upfront and disclose all fees and any commissions on life products in pounds and pence, in writing, prior to a client accepting advice. The provider's documentation must also show these figures, again in pounds and pence. 

The waiver question has been asked on here many times. The FCA do not accept them. The reason being that clients can easily claim that they didn't know what they were signing and just signed what they were asked to.

sandsy

Icarus001 said:

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.  

If you have received advice on which annuity to buy, the annuity provider can only pay the advice charge you agreed to across to the adviser which, as you say, will reduce the amount available to secure an annuity income. In those circumstances, there is no commission. An adviser is not allowed to receive commission for giving you advice and an annuity provider is not allowed to pay commission to an adviser who gave you advice. And you should be fully aware of the advice charge you pay before you receive the advice. 

As for waiving your rights re a DB transfer, it's not allowed. The law requires you to take advice before the trustees can release the funds they hold in trust to pay your DB income. Most people have never given up a DB pension and many who do later wish they hadn't. 

dunstonh

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.

You are incorrect on multiple fronts there.

1 - Since 2013, advice has only been fee based and the client pays the fee explicitly.   There is no commission/factoring any more.

2 - The adviser is required to agree the fee with you before you are committed and a fee agreement is issued for you to sign to agree the fee.  The fee is then repeatedly disclosed in the illustrations and suitability report.

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. 

Also wrong.   If you select to have the fee paid out of the pension pot then it is the exact same fee agreed and comes out of the fund value.  Annuity providers do not pay any commission.

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. 

Are you sure you have attempted ot use an adviser?     Non-advised annuity sales are not required to be fee based and can be commission still.   Everything you are saying suggests a non-advised sale.   Everything you say that there should be is what happens on an advised sale.

I’m happy to sign any declaration to waiver my rights  

The regulatory position is that individuals are not in a position to waive rights in things they may not know anything about.

It is clear that you dont appear to know as much as you think looking at your posts here.   So, maybe the protections are sensible for you as well.