Final Salary Pension Transfer

theronkinator

We've spoken to at least two IFA's (neither True Potential) who have strongly indicated that if we want to transfer to anywhere other than their own platform then they wouldn't proceed with the process. We're speaking to another advisor soon to see how that goes. From what I understand you can just go to their platform then transfer out anyway and they can't stop you?

Malthusian

theronkinator said:

We've spoken to at least two IFA's (neither True Potential) who have strongly indicated that if we want to transfer to anywhere other than their own platform then they wouldn't proceed with the process.

Are you sure they are IFAs? Independent Financial Advisers must consider the whole of the market so if they refuse to countenance a transfer to your preferred platform when giving advice, they are tied advisers (aka restricted).

There is however nothing to stop an IFA (or tied FA) declining business from someone who wants to pick their own platform and/or investments because they don't cater for that particular section of the market.

From what I understand you can just go to their platform then transfer out anyway and they can't stop you?

There is no requirement to take advice on transferring DC pension 1 to DC pension 2 if there are no safeguarded rights. Whether DC pension 1 originated from a defined benefit transfer makes no difference.

kuratowski

You need to watch out for exit fees on DC pension 1, though.

theronkinator

Malthusian said:

theronkinator said:

We've spoken to at least two IFA's (neither True Potential) who have strongly indicated that if we want to transfer to anywhere other than their own platform then they wouldn't proceed with the process.

Are you sure they are IFAs? Independent Financial Advisers must consider the whole of the market so if they refuse to countenance a transfer to your preferred platform when giving advice, they are tied advisers (aka restricted).

There is however nothing to stop an IFA (or tied FA) declining business from someone who wants to pick their own platform and/or investments because they don't cater for that particular section of the market.

From what I understand you can just go to their platform then transfer out anyway and they can't stop you?

There is no requirement to take advice on transferring DC pension 1 to DC pension 2 if there are no safeguarded rights. Whether DC pension 1 originated from a defined benefit transfer makes no difference.

I'm not 100% but we found  them via some of the Get Advice Links on the AJ Bell site around moving Defined Benefit pensions, they don't explicity state it, but they strongly imply they won't proceed with the DB Transfer report that we need. That sounds like once we've got it moved over we can move it onwards with no problem. I don't think there are exit fees from what we've seen. It's all quite murky one of them wasn't happy to continue even after we asked about exit fees as they thought we might hit and run which we plan to do but that's after they've got their insane transfer report fee anyway. All this approval stuff has done is created a legalised scam where they can charge what they want and you don't have much choice because it's so difficult to find people to do it (we had one quote for £6.5k per pot,we have three).

dunstonh

. All this approval stuff has done is created a legalised scam where they can charge what they want and you don't have much choice because it's so difficult to find people to do it 

Rubbish. It is not even close to being a scam.

And if it is so profitable why do so few do it? and how come so many businesses that have done them have either had to close down or stop doing them because it is not profitable to conitnue.

(we had one quote for £6.5k per pot,we have three).

That is generally known as a passive blocker.  It means the firm doesn't really want to do it.  So, they price themselves uncompetitively.  It is used in many business areas across all industries.

Trev24

dunstonh said:

. All this approval stuff has done is created a legalised scam where they can charge what they want and you don't have much choice because it's so difficult to find people to do it 

Rubbish. It is not even close to being a scam.

And if it is so profitable why do so few do it? and how come so many businesses that have done them have either had to close down or stop doing them because it is not profitable to conitnue.

(we had one quote for £6.5k per pot,we have three).

That is generally known as a passive blocker.  It means the firm doesn't really want to do it.  So, they price themselves uncompetitively.  It is used in many business areas across all industries.

From the feedback I have received it appears that there is very little chance that the recommendation will be positive or add any value for the disproportionately high fees. To help avoid people that are approaching pension age of burning up their savings would it not be beneficial if there was guidance on circumstances that would enable the transfer of a final salary pension pot. 

Malthusian

Trev24 said:

From the feedback I have received it appears that there is very little chance that the recommendation will be positive or add any value for the disproportionately high fees.

You pays your money and you takes your choice. If you don't think it will add value (whether via the advice itself or by enabling higher returns over time by cashing in the DB pension or both) you don't have to pay for it.

To help avoid people that are approaching pension age of burning up their savings would it not be beneficial if there was guidance on circumstances that would enable the transfer of a final salary pension pot.

There is a plethora of guidance on how you can transfer a final salary pension pot and plenty of directories to assist with finding the necessary professional advice.

If someone is "burning up their savings" it is less likely that cashing in their DB pension and losing their source of secure income in later life, which will help meet their needs when they don't have any savings, will be suitable.

RoadToRiches

whoever you go to you should expect various stages of advice.

Initial chat free - you'll get a good or bad feeling from this to be honest
Abridged Advice - A fee would be payable, probably around a grand, and you get a report that says it's unclear whether you should transfer or a straight no. You should hope to get a Unclear.  This is not the full advice needed to transfer though.
Move onto Full Advice - this is then payable whether the decision is yes or no and is the main fee.  You get a bunch of reports at the end of this with a recommendation to transfer or not.  If it's a no then you are entitled to have a form signed by the IFA to show you have taken full regulated financial advice, you can then go against the IFA advice should you wish by sending that form to the DB pension scheme.  You'd have to find a new pension scheme that would accept insistent clients, there are not many that do right now.

This whole process took 3 months to complete, and I had to push it along, they don't rush any of this.  I say that so you don't go getting a CETV before you get someone to work with.

dunstonh

From the feedback I have received it appears that there is very little chance that the recommendation will be positive or add any value for the disproportionately high fees. 

I would disagree but equally, I could see scenarios where you could get that impression.  

When you contact an adviser and discuss what you are looking for, you may be saying things that the adviser immediately sees as potential issues.  They would likely be more pessimistic when positioning the chances of a recommendation to transfer.   If you are contacting an FA where the parent company has more restrictions, they too would likely position it accordingly.   

You could have to accept that your scenario may just be one that does not fit with a recommendation to transfer.  

The FCA stats published since they started investigating DB pension transfers indicates that recommendations to transfer are back in the ballpark of where they used to be before the factory line companies started doing it willy nilly.

I personally do feel that the FCA is overly cautious on DB transfers but equally aware that the DB transfer factories were just vehicles to take advantage of high CETVs.   I was saying years before the FCA got involved that it felt like Deja Vu.   

rich744

RoadToRiches said:

whoever you go to you should expect various stages of advice.

Initial chat free - you'll get a good or bad feeling from this to be honest
Abridged Advice - A fee would be payable, probably around a grand, and you get a report that says it's unclear whether you should transfer or a straight no. You should hope to get a Unclear.  This is not the full advice needed to transfer though.
Move onto Full Advice - this is then payable whether the decision is yes or no and is the main fee.  You get a bunch of reports at the end of this with a recommendation to transfer or not.  If it's a no then you are entitled to have a form signed by the IFA to show you have taken full regulated financial advice, you can then go against the IFA advice should you wish by sending that form to the DB pension scheme.  You'd have to find a new pension scheme that would accept insistent clients, there are not many that do right now.

This whole process took 3 months to complete, and I had to push it along, they don't rush any of this.  I say that so you don't go getting a CETV before you get someone to work with.

no one has been able to name a scheme that will accept an insistent client since AJ Bell closed the door. 

Many suggest that it 'should' be possible, but there is no evidence of a successful route.