Defined Benefit / Final Salary Pension

Prism

dunstonh said:

jamesd said:

Standard Life says phone them to open their stakeholder pension. I just did that and they told me that they would accept a transfer against advice from a defined benefit scheme provided an adviser was doing it. They were explicit that it didn't matter what the advice was, just that an adviser did the transfer.

Thank you for the clarification.  In which case, that rules out Standard Life as an option.   

Surely unless there are advisors out there which are willing to go against their own advice and do the transfer anyway. Or maybe a PTS does the initial work, the outcome being don't transfer and then the insistent client find another IFA who is willing to go against the initial advice and do the transfer anyway. Sounds a touch risky!

Linton

Prism said:

dunstonh said:

jamesd said:

Standard Life says phone them to open their stakeholder pension. I just did that and they told me that they would accept a transfer against advice from a defined benefit scheme provided an adviser was doing it. They were explicit that it didn't matter what the advice was, just that an adviser did the transfer.

Thank you for the clarification.  In which case, that rules out Standard Life as an option.   

Surely unless there are advisors out there which are willing to go against their own advice and do the transfer anyway. Or maybe a PTS does the initial work, the outcome being don't transfer and then the insistent client find another IFA who is willing to go against the initial advice and do the transfer anyway. Sounds a touch risky!

Surely that would be by definition a mis-sale since if the customer's investments failed they would have documentary proof that the transfer was not actually in their best interests.  

dunstonh

Prism said:

dunstonh said:

jamesd said:

Standard Life says phone them to open their stakeholder pension. I just did that and they told me that they would accept a transfer against advice from a defined benefit scheme provided an adviser was doing it. They were explicit that it didn't matter what the advice was, just that an adviser did the transfer.

Thank you for the clarification.  In which case, that rules out Standard Life as an option.   

Surely unless there are advisors out there which are willing to go against their own advice and do the transfer anyway. Or maybe a PTS does the initial work, the outcome being don't transfer and then the insistent client find another IFA who is willing to go against the initial advice and do the transfer anyway. Sounds a touch risky!

Since the FCA stepped in and gave a range of clarifications etc, the firms that say you should not transfer it will not themselves transact it on an insistent client basis.    Firms were doing this prior to FCA intervention.
Another IFA who is not the PTS won't do it either as the IFA firm whose agency the business is transacted through carries the liability of that transaction.   An insistent client basis requires the adviser to state what the advice is after going through the advice process.   If they don't hold PTS permissions, they cant do that, even if they wanted to.

xylophone

Thank you for the clarification.  In which case, that rules out Standard Life as an option.   

I'm still puzzled.

Let's suppose Joe Bloggs rings SL and sets up a stakeholder. It would not appear that any kind of advice is required for him to do this.

He starts to  make contributions.

Joe is  also a member of a DB Scheme.

He obtains his CETV and regulated advice from a Pension Transfer Specialist.

The advice is not to transfer out.

Nevertheless, Joe has his piece of paper confirming he has taken regulated advice.

How can SL refuse to accept the DB pension transfer when Joe has his stakeholder (which  (apparently) can be opened without advice and which (apparently) must by law accept a transfer from any registered pension scheme?

https://www.legislation.gov.uk/uksi/2000/1403/made

(6) For the purposes of these Regulations and section 1(8) and (9) (which provide that stakeholder pension schemes must have tax-exemption or tax-approval and must not refuse to accept transfer payments except in so far as necessary to ensure that the scheme has such exemption or approval) “tax-exemption” and “tax-approval” mean tax-exemption and tax-approval under Chapter IV of Part XIV of the Income and Corporation Taxes Act.

Similarly, lets suppose Joe  had gone via an intermediary and set up an AVIVA stakeholder and did the same as outlined above.

https://www.aviva.co.uk/adviser/documents/view/sp01001c.pdf

Transfers from another pension plan

If you have other pension plans too, it’s normally possible to transfer them into the Stakeholder Pension –

Transferring pensions isn’t right for everyone and you need to consider the charges, fund ranges, any valuable benefits that could be lost and any tax implications.

There’s no guarantee that you’ll be any better off by transferring. If you’re at all unsure whether this is right for you then you should speak to a financial adviser before going ahead. Remember that the value of your pension can go up as well as down and you may get back less than has been paid in. 

Nothing in the above to say "must" speak to an adviser before going ahead...

And

https://mlpwealth.co.uk/news-updates/28-why-will-no-one-help-me-cash-in-my-pension

But of course this may have been overtaken by events (AJBell change.....)

However, AJ Bell, a rival, confirmed that it would accept transfers irrespective of the adviser’s recommendation. Prudential and Aviva said they had no way to know whether an adviser had made a positive or negative recommendation.

Still, the position re stakeholders seems rather murky?

dunstonh

How can SL refuse to accept the DB pension transfer when Joe has his stakeholder (which  (apparently) can be opened without advice and which (apparently) must by law accept a transfer from any registered pension scheme?

Because, going by what James was told, SL have said they will only accept transfers in via an intermediary.   So, their method of distribution blocks the move rather than the product blocking the move.

Restricted offerings can restrict their distribution all they like.  It has happened for decades that in-house distributions cannot do things with certain products that an IFA can do with the same product.    Lots of group stakeholder pension schemes wont accept transfers in either. Not because the product cannot do it (it can). But becomes the intermediary/administrator they are linked to won't do it.

Prudential and Aviva said they had no way to know whether an adviser had made a positive or negative recommendation.

Prudential doesn't offer a stakeholder pension for new business any more.   Aviva may have said that to someone but I suspect it's not correct.   All the modern Aviva applications either ask the question about advised or non-advised or actually default to only accept only advised transactions. For example, the Aviva platform will not accept non-advised business or any non-advised transaction.     The Aviva stakeholder pension has a tick box on it to say it was non-advised or an adviser section to complete if placed via an adviser.   However, it is unclear whether Aviva will accept a direct to consumer application.

Still, the position re stakeholders seems rather murky?

It is.   

Defaqto lists 4 stakeholder pensions still open for business (possibly more may exist but the defaqto list is pretty reliable unless a provider wants to go into hiding).

Aviva, Foresters, Royal London, Standard Life.