Pension has finally landed - As an insistent client acting against advice -*DOORS CLOSED 03/09/2021*

vram

TransferDB said:

vram said:

TransferDB said:

Serious ill health carve out – this allows those in serious ill health to get advice on a contingent charged basis. The major change here is that the client can self-certify providing evidence to the adviser of their health circumstances.

No not been told that or offered it ans TBH don't understand that can you elaborate please?

you have to pay advisors now when they finish the advice its known as a ban on contingent charging which it was before that you only paid upon transfer i think.

so you only really paid them if they transfered the pot but since the ban you are no longer allowed to pay them this way they get there money no matter what (basically up front) but at the end of advice

But there are two exceptions to the rule and one is serious ill health so you would be allowed in therory if accepted by a FA to go back to the old way and only pay the 7000 if they transfered it and advice was yes

however your problem will be to find advisor that is willing to look at this exception and accept it. it would only be a way round having to pay them full amount regardless of decision it wouldnt help with the decsion itself to transfer or not

hope that helps

That is very interesting. Do you mean that this is an option that can be applied by an IFA (at their discretion) or is it laid out as a ruling by the FCA rules? Should I put this to him and is there any section I can quote from? I do not mind paying but do not want to pay if it all achieves a no transfer decision by the IFA or anyone else.

It's an option, an IFA can use at their discretion as long as they follow srict rules when considering taking clients.

If they do accept it and are willing to proceed then they have to follow the fca rules for it.

However just because there is a rule for it and how to handle it, doesnt mean they will let you use it.

As they may decide like they have with insistent clients which their are specific FCA rules for as well in cobbs, that IFA will not acccept insistent clients full stop. Its not a rule in law, its a business decision based on risk, otherwise they would not have rules for it in cobbs would they. Its all to do with insurance and liability risk.

For instance if they were to accept isistent clients they may be liabel at a later stage if laws changed retrospectively that they helped to facilitate the transfer against advice  and against the best interest of customer making them liable to be sued over the transfer/transaction so they simply refuse to help insistent clients nowadays even though the process is there to do it.

So although the rules exists to facilitate this, I have not seen any IFA who openly talked about this option when you first tel so maybe they all won't do it at all I dont know.

My suggestion is to ring some up and ask do you accept clients who are in ill health on a contigent charging basis as per the fca rules and if you do what is the qualifying criteria.

Dont forget to look it up first to see if you would possibly qualify.

This is what I mean the whole lot of it is sewn up to not allow you access to your monies because the system is not fit for purpose.

It tells you one thing then you find out you can't after spending thousands.

Goverment is making Laws to give you access to pensions

then one lot is making rules for advisors the FCA (Financial Conduct Authority),

another is making rules for Trustees and schemes (Financial Regulatory Authority)

and the other lot the actual IFA (independent financial adviser) are too scared to follow them so  and we are caught in the middle.

and the advisors wonder why we think the way we do about them and the whole system Hmm

Malthusian

Dale72 said:

Not including additional contributions. But wont all FA/IFAs view holding only individual shares as high risk? and if so then what's the point of going through the process of assessing my level of risk tolerance, other than as a box ticking exercise?

Not everyone who holds a high risk portfolio of individual shares is a high risk investor. They might be a lockdown trader who traded shares on eToro because everyone else was. Or inherited a portfolio of individual shares from a husband or parent.

And talking about "risk tolerance" in your case is a red herring. The kind of portfolio that can generate an 80%pa return (simple) for five years (which means either the investor is day-trading or holding a concentrated portfolio of early-stage companies or both) is off the scale on the risk charts. The likely outcome of them cashing in their DB scheme is that they will lose it and end up much worse than if they'd taken the DB pension. Everyone's luck runs out eventually.

This may not apply to you because you have some magic formula that allows you to generate 80%pa returns forever without the risk of losing it. Unfortunately this is no use to you in getting a positive recommendation. For an IFA to be able to give a positive recommendation on the basis of "My client has a magic formula that will allow him to get 80%pa returns on his CETV without the usual risk of loss", you would have to share the magic formula with him, at which point he and the rest of the finance industry would start copying what you're doing, and you would lose your future returns.

But that doesn't matter as you have as much need for a positive recommendation as Lewis Hamilton has for a Pass Plus certificate. Even if you were transferring today, the barriers to transferring with a negative recommendation would be no issue to you as anyone who can generate 80%pa returns consistently from the stockmarket will find it easy to open a SSAS, and the cost will be trivial next to their future returns.

For anyone who can consistently quadruple their money every five years, their DB pension will be pin money anyway, regardless of how much money they have outside the DB pension.

Diplodicus

Thankers enjoying a snicker at Dale72's expense.

But the basic problem is now starker than when AJ Bell ushered Dale's DB pension through..

1) The potential DB pension client should have the final determination.
2) But the client has to buy advice.
3) If the advice is not to transfer; it would now be extremely hard to transfer.
4) Thus, the financial adviser takes control of the outcome, which is very unhealthy.

That's where we all are, I'm afraid.

xylophone

Thus, the financial adviser takes control of the outcome, 

The law requires that the advice be taken from a suitably qualified adviser.

He is bound by the rules relating to transfer business to consider all relevant circumstances and give his honest assessment of whether it is in  his client's best interests to transfer  the safeguarded benefits to a scheme offering flexible benefits.

The fact that a person may not find it easy to transfer out  if the advice is  not to transfer does not equate to his taking control of the outcome.

You surely aren't saying that he should compromise his professional position by recommending a transfer when he considers it would not be suitable?

Diplodicus

If the adviser is bound by the parameters you state above, then why had the FCA to act to ban contingent charging.

Edit:  "if" means "since"

xylophone

If the adviser is bound by the parameters you state above, then why had the FCA to act to ban contingent charging.

How is that relevant to matters as they now stand?

https://www.handbook.fca.org.uk/handbook/COBS/19/1B.html

Diplodicus

Because clients who, unwillingly or not, buy DB pension transfer advice do so to get -what were the words? -"an honest assessment of whether it is in  his client's best interests to transfer  the safeguarded benefits to a scheme offering flexible benefits."

And if that were the case, contingent charging would make no difference to the outcome. Agreed, xylophone?

xylophone

Because clients who, unwillingly or not, buy DB pension transfer advice do so to get -what were the words? -"an honest assessment of whether it is in  his client's best interests to transfer  the safeguarded benefits to a scheme offering flexible benefits."

Yes, that is the case.

And if that were the case, contingent charging would make no difference to the outcome. Agreed, xylophone?

Contingent charging would and should make no difference to the advice given  if the adviser is doing his job and giving his honest opinion as to the suitability of the transfer.

And the FCA has acted  to prevent  conflict of interest or even appearance of conflict of interest

COBS 19.1B.2G01/10/2020

The purpose of this section is to ensure that firms’ charging structures, either individually or taken together with other associates, do not create any potential for a conflict of interest relating to, or an incentive to recommend or effect, a pension transfer or a pension conversion to a retail client.

 

But this is irrelevant to my comments on 

the financial adviser takes control of the outcome

I say again that the adviser does not control the outcome!  He controls what he writes in his report to his client.

In that report, he gives his honest assessment of the benefit (or otherwise) to his client of a transfer out. 

The nature of that assessment affects the decision made by his client.

If the client trusts the adviser to give a "best interests" assessment, why would he not accept the advice?

If he doesn't want to accept the advice, he can go against it but will need to put in the work to  find (or set up) an accepting scheme.

As I have said on a number of occasions, it seems to me that the stance of the stakeholder pension providers could (possibly should) be challenged as they appear not to be acting within the letter of the law.

If such a challenge did not succeed, then the SSAS route appears to be available.

Diplodicus

But that contract depends on the adviser making an "honest" assessment.

I had two. One said No, one said yes.

Had I accepted the first, I would be c £300k worse off today. But I knew that he had made that call in his own interest.

Yet I was lucky to be in a time when I could override the original recommendation.

The reality now is that insistent clients are stymied.

Or please spell out the way forward below?

xylophone

The reality now is that insistent clients are stymied.
Or please spell out the way forward below?

They try the stakeholder route - a refusal can be challenged.

If the challenge does not succeed, then they try the SSAS.

The route to the SSAS has been discussed in earlier posts.

I am not saying that the situation is not frustrating for the client.

But his situation is not the fault of the adviser who has acted within the appropriate guidelines and given the answer which he believes to be in the best interest of the client.

It is not his fault that pension providers are unwilling to take on "insistent clients".