DB Transfer

Prism

ZingPowZing said:

HappyHarry said:

jamesd said:

HappyHarry said: 

Agreed, but a DB pension is not part of an individual's own savings. They are are assets of the employer sponsored pension scheme designed to provide an income for their employees in retirement. In no sense could these be counted as an individual's savings.

In many (most?) cases, the DB scheme is unfunded so there are not even any assets to pretend otherwise with.

The DB pension is part of an individual's retirement plan and it's right that they should be able to adjust that plan when it seems right to do so.

The whole "it's my money I should be able to do what I want" brigade do need saving from themselves sometimes. I am not in favour of a nanny state particularly, but I have been an adviser for long enough to see the kinds of errors that many have made, and have come to the conclusion that many people do need saving from themselves.



I think a complete ban would be a better option for most would be transferees.

As one of those who was "saved from themselves" by a financial adviser (for £7,600) let me tell you that we do not see DB pensions and DC pensions as different species. Quite a few of us had both, sometimes with the same company. Like discriminating between types of financial adviser, it can seem to those outside a nice but artificial distinction. Sure, I gave up certain guarantees on the transfer of my DB pension but I could easily buy them back on subsequent gains.

And now that I have full control over my SIPP, I make no distinction between investments there and outside - they are highly correlated. And that is how I am going to use what was my DB pension, for growth in a tax-sheltered environment; at least until I near LTA.

Are you currently advising on DB pension transfers, HappyHarry?

Its seems to have worked for you so far ZPZ but you won't know for sure for the next 30 years or more. The stock markets could tank for many years and at some future point a more bitter version of yourself might decide to revisit that process that let you transfer and raise a complaint

Well, maybe not you, but someone else in the same boat with less fortunate timing might.

HappyHarry

Yes, I do advise on transfers. Over the past 12 months I have recommend transfers more often than I recommended retaining the DB pension. However, my clients tend to be amongst the more wealthy of the population, meaning that they have other sources of retirement income.

As I said in my post, some individuals need saving from themselves, and some individuals are quite capable of making their own rational decisions to transfer, and rightly begrudge the need to pay an adviser. How legislation could differentiate between the two is a conundrum.

[Deleted User]

Happy Harry, when you have someone insistent on exercising their right to transfer their DB pension, against your recommendation, and now that AJ Bell is closed to that business,  what do you tell your client at that point?

HappyHarry

ZingPowZing said:

Happy Harry, when you have someone insistent on exercising their right to transfer their DB pension, against your recommendation, and now that AJ Bell is closed to that business,  what do you tell your client at that point?

I haven't had that situation. 

However, if asked, I would not provide the name of any business that could help further.

Simply put, I would not assist a client in transferring against my advice.

[Deleted User]

So
a) You accept that the final determination belongs to the client.
b) You recognise that this is a client who “needs saving from themselves” - at his most vulnerable but left to straits you are vastly more proficient to navigate. 
c) You still take their coin.

[Deleted User]

Do you actually know - or care - whether your insistent client can proceed past your negative recommendation?

HappyHarry

ZingPowZing said:

So
a) You accept that the final determination belongs to the client.
b) You recognise that this is a client who “needs saving from themselves” - at his most vulnerable but left to straits you are vastly more proficient to navigate. 
c) You still take their coin.

a) yes - but I wish it didn't
b) Maybe. Sometimes a client wants to know whether or not they should transfer. I have never dealt with a client who has been unhappy with my advice to retain their DB pension. If I don't think that they should transfer, I will explain clearly why in my report and the meeting where it is presented. If they insist after that, and I cannot persuade them otherwise, then I will not help them further. See (a) above.
c) Yes - I am being paid to advice on whether to transfer or not. It is usually only on the completion of my work that I can determine if a transfer is appropriate or not. I am not allowed to charge a different amount depending on the outcome of the advice. There are times when it is abundantly clear that a transfer won't be appropriate, and I have refused to give advice under such circumstances. There is no point in a client paying for advice when it is clear from the outset that the advice will be to retain their DB scheme.

HappyHarry

ZingPowZing said:

Do you actually know - or care - whether your insistent client can proceed past your negative recommendation?

I know that they could proceed past a recommendation to retain their DB pension. 

I would be upset to learn that they had. It would make me wonder what I could have done to persuade them otherwise.

As an aside, a recommendation to retain a DB pension should not be seen as a “negative recommendation”.

[Deleted User]

HappyHarry said:

ZingPowZing said:

Do you actually know - or care - whether your insistent client can proceed past your negative recommendation?

I know that they could proceed past a recommendation to retain their DB pension. 

Thanks HappyHarry, good to know. 

How would they do that? (as you state below every post, it would not be advice)

HappyHarry

ZingPowZing said:

HappyHarry said:

ZingPowZing said:

Do you actually know - or care - whether your insistent client can proceed past your negative recommendation?

I know that they could proceed past a recommendation to retain their DB pension. 

Thanks HappyHarry, good to know. 

How would they do that? (as you state below every post, it would not be advice)

They find a provider willing to accept the transfer. I would have to sign a form saying that I have given advice, and they would need to show that to the new provider, who would pass it on to the DB administrators.

Thinking about that last point, I have never been asked to sign that form for a client I had recommended retain their DB pension, so I can safely say that none of my clients have insisted on transferring against my advice.