Transfer DB pension

Diplodicus

TransferDB said:

Diplodicus said:

MallyGirl said:

Contingent charging means a client only pays for the advice if they go ahead with a transfer

In October 2020, a ban on contingent charging came into effect with a view to remove the conflicts of interest which arise when an adviser only gets paid if a transfer goes ahead.

Only consumers with certain identifiable circumstances, such as those suffering from serious ill-health or experiencing serious financial hardship, are exempt.

I don't get it MallyGirl; please help me out: 

If clients are bound to consult a financial adviser, and their financial advisers are bound to give advice in the best interest of the client; why would contingent charging make any difference to the advice?

Diplodicus said:

MallyGirl said:

Contingent charging means a client only pays for the advice if they go ahead with a transfer

In October 2020, a ban on contingent charging came into effect with a view to remove the conflicts of interest which arise when an adviser only gets paid if a transfer goes ahead.

Only consumers with certain identifiable circumstances, such as those suffering from serious ill-health or experiencing serious financial hardship, are exempt.

I don't get it MallyGirl; please help me out: 

If clients are bound to consult a financial adviser, and their financial advisers are bound to give advice in the best interest of the client; why would contingent charging make any difference to the advice?

As someone with cancer seeking advice and having to transfer a DB pension because of bad death benefits (the absurdity of the phrase "death benefits"!) plus the worry and pressure of having to get advice and being told "that if the advice fails to result in a transfer you still have to pay £7000 charges" along with trying to cope with the diagnosis implications and the treatment ahead...I can tell you it does matter that no transfer = no cost.

Yes, I appreciate your concern, TransferDB. 
The last communiqué from your IFA looks entirely sensible and encouraging : of course they cannot pre-empt the outcome of the recommendation. But just make sure you won't be left liable for any fee if the advice is not to transfer because, despite some glossing over the difficulty facing the insistent client, you would undoubtedly find such an exercise supremely stressful.

Good luck!

TransferDB

dunstonh said:

 "I do plan to discuss all of this with you when I see you next week hence another reason why I am keeping my response brief. Whilst an exception under carve out is a possibility it is not a given, which means that our internal compliance procedures may still prevent us from making a recommendation to you to transfer if this is not deemed to be in your best interests longer term, as best advice is all about what is best for the client in both the short, medium and longer term as previously mentioned so at this stage I still cannot guarantee that you would be able to transfer I’m afraid."

That is the sort of response I would expect as it is not straightforward.  Especially if a) your current medical status is serious but future unknown and b) cancer suffers would be considered vulnerable to poor decision making and the FOS virtually auto-upholds complaints about new investing when the person is suffering cancer.   

These can be very much judgement call decisions but unfortunately, the regulator and ombudsman often live in a hindsight world.  It is possible that you could be told to defer the advice outcome for a period.  i.e. get as much info as you can now but wait until your health position is more certain (as much as it can be).  If the news is not good, then proceed but if you get a recovery then do not proceed.

"It is possible that you could be told to defer the advice outcome for a period.  i.e. get as much info as you can now but wait until your health position is more certain (as much as it can be).  If the news is not good, then proceed but if you get a recovery then do not proceed."

I only have 3 months as been issued the transfer value. Due to start pensions in March '22 my decision to transfer would probably still be my first choice as the so called DB benefits are not of real value compared to having flexibility and being able to pass on my fund if need be.

Silvertabby

Have you asked if your DB scheme will allow a transfer out once you are within 12 months of your NRA?  Some won't.

TransferDB

Diplodicus said:

TransferDB said:

Diplodicus said:

MallyGirl said:

Contingent charging means a client only pays for the advice if they go ahead with a transfer

In October 2020, a ban on contingent charging came into effect with a view to remove the conflicts of interest which arise when an adviser only gets paid if a transfer goes ahead.

Only consumers with certain identifiable circumstances, such as those suffering from serious ill-health or experiencing serious financial hardship, are exempt.

I don't get it MallyGirl; please help me out: 

If clients are bound to consult a financial adviser, and their financial advisers are bound to give advice in the best interest of the client; why would contingent charging make any difference to the advice?

Diplodicus said:

MallyGirl said:

Contingent charging means a client only pays for the advice if they go ahead with a transfer

In October 2020, a ban on contingent charging came into effect with a view to remove the conflicts of interest which arise when an adviser only gets paid if a transfer goes ahead.

Only consumers with certain identifiable circumstances, such as those suffering from serious ill-health or experiencing serious financial hardship, are exempt.

I don't get it MallyGirl; please help me out: 

If clients are bound to consult a financial adviser, and their financial advisers are bound to give advice in the best interest of the client; why would contingent charging make any difference to the advice?

As someone with cancer seeking advice and having to transfer a DB pension because of bad death benefits (the absurdity of the phrase "death benefits"!) plus the worry and pressure of having to get advice and being told "that if the advice fails to result in a transfer you still have to pay £7000 charges" along with trying to cope with the diagnosis implications and the treatment ahead...I can tell you it does matter that no transfer = no cost.

Yes, I appreciate your concern, TransferDB. 
The last communiqué from your IFA looks entirely sensible and encouraging : of course they cannot pre-empt the outcome of the recommendation. But just make sure you won't be left liable for any fee if the advice is not to transfer because, despite some glossing over the difficulty facing the insistent client, you would undoubtedly find such an exercise supremely stressful.

Good luck!

Yes, the stress even now without actually starting the process is a nuisance because no IFA's seem to want to commit to an unequivocal "you can transfer" or "you can't transfer" with any definite reasons either way. In my mind that was the advice I wanted initially. The IFA I am talking to says I have 4 good reasons to transfer or for wanting to do so. And as you say, the cost if it achieves nothing or ends in stalemate is very high. I intend to take 25% tax free from every pot just to get it away from the pensions.

TransferDB

Silvertabby said:

Have you asked if your DB scheme will allow a transfer out once you are within 12 months of your NRA?  Some won't.

Well I contacted helpline a month ago and told them I wanted to transfer and they updated my transfer quote and posted all the forms to me...So I assume so

xylophone

 I am 64 and have recently been diagnosed with prostate cancer - am having treatment and as yet have no full knowledge of the extent of the cancer or my life expectancy. I have a DB pension (transfer value £172k) but the death benefits do not cover my needs to pass on the fund in full to my family so am looking at a transfer.

The section on transfers in ill health might be relevant.

https://techzone.abrdn.com/anon/public/pensions/tech-guide-db-to-dc-transfers

If the OP does not transfer the pension, perhaps he would be able to bring it into payment and in view of the fact that his wife is so well provided for by her own scheme,  take  the maximum lump sum and gift it to his  wife who could gift it to the sons in the hope of a  successful PET?

If he were to die while the pension was in payment, his wife would receive a widow's pension and if she didn't need the money, could use it to make regular gifts from income to the sons?

TransferDB

dunstonh said:

 "I do plan to discuss all of this with you when I see you next week hence another reason why I am keeping my response brief. Whilst an exception under carve out is a possibility it is not a given, which means that our internal compliance procedures may still prevent us from making a recommendation to you to transfer if this is not deemed to be in your best interests longer term, as best advice is all about what is best for the client in both the short, medium and longer term as previously mentioned so at this stage I still cannot guarantee that you would be able to transfer I’m afraid."

b) cancer suffers would be considered vulnerable to poor decision making and the FOS virtually auto-upholds complaints about new investing when the person is suffering cancer.   

Yes, I understand your valid point but TBH a cancer sufferer may actually see things far more clearly than they did before the diagnosis? Because when life threatening events occur, with the stark reality of unstoppable impending change, or fear and the inevitable shift in priorities will and do alter your values. But not necessarily always in a bad or adverse or self destructive way. I feel very calm and focused on sorting this and hopefully dealing with the cancer. My initial idea was simply to move the pension (that will effectively be lost if I die early) to another smaller one I have that allows full inheritance to a named beneficiary on death. Not to enter the investing world of drawdown or whatever! But a good IFA should be able to be my guide.   

TransferDB

Silvertabby said:

Have you asked if your DB scheme will allow a transfer out once you are within 12 months of your NRA?  Some won't.

Yes. I spoke to the pension helpline they prepared a new transfer value and sent all the paperwork and forms for both transferring out or taking the DB pension as it is - they also tried to help with getting an IFA by email and calling Mac Millan. In 2019 they did offer free advice to all of the members to opt out but I missed out but they have asked the firm of IFA's if they could help or advise.

TransferDB

xylophone said:

 I am 64 and have recently been diagnosed with prostate cancer - am having treatment and as yet have no full knowledge of the extent of the cancer or my life expectancy. I have a DB pension (transfer value £172k) but the death benefits do not cover my needs to pass on the fund in full to my family so am looking at a transfer.

The section on transfers in ill health might be relevant.



If the OP does not transfer the pension, perhaps he would be able to bring it into payment and in view of the fact that his wife is so well provided for by her own scheme,  take  the maximum lump sum and gift it to his  wife who could gift it to the sons in the hope of a  successful PET?

If he were to die while the pension was in payment, his wife would receive a widow's pension and if she didn't need the money, could use it to make regular gifts from income to the sons?

That link looks very interesting I will have a good look - THANKS

Pablo7474

Also note that any advisers I have spoken to won’t do it within the 3 months of the quote. They will base it on the value you have been given and then you will need a requote should they advise to transfer.