DB Pension Transfer Advice

Prism

RoadToRiches said:

No but with the signed form you can take it to a provider who will accept insistent clients acting against the advice

Which Standard Life do not seem to be one of unless the transfer is done by an advisor.

RoadToRiches

DaveT55 said:

Please note that if our advice is to remain in the scheme and you disagree with that advice, we do not then offer you the option of becoming an “insistent client” and transferring out against our advice, as we do not believe that would be in your best interests."

They cannot refuse to sign the form to say you have taken independent financial advise, this is a requirement by the FCA. As an insistent client you act on your own with that document having found someone who will accept the funds into their pension scheme on taking full advice. 

As you will see on the form that goes to the pension trustees they do not ask if the advice from the IFA was positive or negative as all they will care about is you have taken full regulated advice. 

The IFA may even write on the form to say we have given advice and recommend they do not transfer and the pension fund will still accept it as you have taken advice and that’s all they need.

RoadToRiches

Prism said:

RoadToRiches said:

No but with the signed form you can take it to a provider who will accept insistent clients acting against the advice

Which Standard Life do not seem to be one of unless the transfer is done by an advisor.

Fair enough, I know a provider accepting insistent clients at this time and it’s not them. Things change so this may not last for long, was thinking this case was further along and they had their final report and IFA advice given form signed.

dunstonh

The retail side of the business, ( now owned by Phoenix but still branded as Standard Life) still accepts business direct from consumer for personal pensions and Sipps, and as far as I know this is where the stakeholder is located .

But was it true direct to consumer product or did they have a team behind the scenes processing it manually as intermediaries? (rhetorical as we don't know).   An intermediary does not necessarily mean adviser.  It ia effectively an agency arrangement.   A few insurers operated this way.  They would tick the non advised box and process it through an agency that showed the insurer as the financial adviser even though they were not advisers.   However, they would only transact regulars and single premiums and not transfers.

Which Standard Life do not seem to be one of unless the transfer is done by an advisor.

Standard Life is currently in a bit of a middle due to it selling its brand name to Phoenix along with its legacy life and pensions book.  Standard Life (original)  is retaining both of its platforms (which operate SIPPs) but they will both be rebranding in the near future to Abrdn.  Abdrn is effectively the original Standard Life and the new Standard Life is going to the brand Phoenix use for new business.  An area that they have not been that active in previously as they mostly bought old unwanted books.
  

The IFA may even write on the form to say we have given advice and recommend they do not transfer and the pension fund will still accept it as you have taken advice and that’s all they need.

Not if it is processed through an agency as an intermediary.  

Malthusian

jamesd said:

Bad decisions by novice investors with more money than they have ever handled are a way bigger risk than the range of investment outcomes, IMO. I know now that I'm not inclined to be profligate with say 600k of capital and not inclined to worry unduly about downturns but that doesn't apply to everyone, particularly not novices.

And we should remind ourselves of the other risk which is that people spend less than they would have got from the DB scheme not due to poor investment performance but because they are worried about running out or future crashes that don't come. As per research in Australia (where drawdown has been the norm for longer than the UK), this is more common than actually spending all your money and falling on the tender mercy of the State. People are only obsessed with the smaller problem thanks to Presbyterian notions that reckless underspending is a virtue.

Or they may spend the same but have sleepless nights about it (which would not be the case with DB income).

If we're talking about regulation and the industry as a whole (i.e. how DB transfers should be regulated) then Guyton-Klinger rules are basically irrelevant as almost nobody understands them. People don't even understand percentages (not my opinion, the FCA's). When drawing down from pension funds the vast majority withdraw at a rate determined by a combination of how much they need, market performance since the last time they looked and gut feel. So whether most people could get more income by transferring out if they use Guyton-Klinger rules and we don't have a once-in-a-century market shock matters little.

If we're talking about individual posters (i.e. should I transfer out of my DB pension) then they are certainly useful, even if only as an illustration of the value of varying income rates according to actual investment performance rather as something the poster may actually calculate every year. Or the complexity of calculating how much you can safely withdraw from your CETV rather than just letting the DB scheme worry about it.

jamesd

Advisers can understand such rules and implement them on behalf of their clients, as Guyton's firm does for his.

DaveT55

Thanks for all your help on this so far. I guess I just need to sit and wait for my valuation and advice date and hopefully the route that RtR mentions remains an option. Hopefully he is willing to share t a later date.

Out of curiosity do you see it being likely that legal challenges are going to follow as a result of people no longer having a free choice to transfer a DB pension outside of positive advice costing several £k?  

dunstonh

Out of curiosity do you see it being likely that legal challenges are going to follow as a result of people no longer having a free choice to transfer a DB pension outside of positive advice costing several £k?  

No.   Who would you take to court?

The Government is not stopping it.   The regulator is not stopping it.   It is commercial decisions by providers and no court can force a company to take on business they do not want.

Malthusian

DaveT55 said:

Out of curiosity do you see it being likely that legal challenges are going to follow as a result of people no longer having a free choice to transfer a DB pension outside of positive advice costing several £k?  

No (as per Dunstonh). The challenge would have to be political, and the last time someone launched a petition to remove the mandatory advice clause, it got fewer signatures than petitions to reverse decimalisation and go back to pounds, shillings and pence, and tax people with more than two children. There is no co-ordinated pressure group with any momentum.

To be fair that is partly because there is no need for one. If the stakeholder pension route was confirmed to be closed off, that might change as more and more frustrated people piled up.

If it actually became impossible to transfer a DB pension against advice, my personal view is that NEST should be obliged to accept all transfers in the way that stakeholder pensions currently are. If there is not a safety valve to allow people who are insistent on cashing in to transfer out with negative recommendations, you are issuing an open invitation for dodgy advisers to issue chicken-and-chips positive recommendations that they know are complete rubbish, and do as many as possible and leg it with the money before the FCA creaks into gear. (A la the dodgy adviser in a recent other thread.)

That would be bad for the insistent transferors as dodgy advisers are likely to do other dodgy things like grossly overcharging them, taking under the table commissions or luring them into outright scams, and more importantly bad for all of us as ultimately we will all pay for that when the business dumps its liabilities on the Financial Services Compensation Scheme.

arty688

I think the issues are the advise is not so much advise but an expensive !!!!!! covering exercise, which is completely justified given the consequences BTW.

and its such a faff to transfer against advise which is by far the most likely outcome given the above.