Poor pension advice

Albermarle

Sunnylifeover50plan said:

Albermarle said

By the way if you had transferred out the £960K 6 months ago and put it in a DC pension, it would have lost about 20% in value by now ( 10% investment loss and 10% inflation loss) . Many people with DC pensions are sweating that their investments have been  going down/not guaranteed /not inflation linked.
Probably many are wishing they were in a DB scheme...........

Some of the funds I bought into in Q1 are now in the black by a percent or two. Yes there's inflation but you can't say fund performance would have been 10% down.

If you look at the first 6 months of 2022, then you could be easily be 20% down if you were fully invested in US stock market, or maybe even some UK gilts/bonds, Then minus 10% inflation on top.
For sure if you had picked a better portfolio later in Q1 , after a lot of the drop happened, and were benefitting from a good July, it would look better.
Most medium risk portfolios will be down a few per cent still this year, even with the recent uptick. Then minus inflation.
The well known and popular Scottish Mortgage Trust, is still 30% down this year . Then minus inflation.

Sunnylifeover50plan

Albermarle said:

Sunnylifeover50plan said:

Albermarle said

By the way if you had transferred out the £960K 6 months ago and put it in a DC pension, it would have lost about 20% in value by now ( 10% investment loss and 10% inflation loss) . Many people with DC pensions are sweating that their investments have been  going down/not guaranteed /not inflation linked.
Probably many are wishing they were in a DB scheme...........

Some of the funds I bought into in Q1 are now in the black by a percent or two. Yes there's inflation but you can't say fund performance would have been 10% down.

If you look at the first 6 months of 2022, then you could be easily be 20% down if you were fully invested in US stock market, or maybe even some UK gilts/bonds, Then minus 10% inflation on top.
For sure if you had picked a better portfolio later in Q1 , after a lot of the drop happened, and were benefitting from a good July, it would look better.
Most medium risk portfolios will be down a few per cent still this year, even with the recent uptick. Then minus inflation.
The well known and popular Scottish Mortgage Trust, is still 30% down this year . Then minus inflation.

I checked my trades and buying in both February and March the investments are in the black. As I said inflation numbers are out there but you can't say that the OP would have lost 10% on the money he would have invested. Not least given you don't know what he would have invested in. That was my point.

Yes I'm down still on earlier investment points but that isn't really relevant given the OP's timelines.

Mr.Generous

coopsy0 said:

 At the time they were offering over 40x annual pensionable income and now offering 27x.  

And this was common knowledge or was your advisor able to guess what they were going to offer in the future, when they probably didn't know themselves?

One of my old bosses transfered a cool £1m just before covid broke out and lost about £150k in a few months, Another colleague transfered after the covid drop and put in £800k - and made £100k in the first year.

Big risks, big losses or big returns. There are always winners and loosers.

rich744

I'm afraid there's a cult of DB scheme supporters here. I see your predicament and empathise. 

QrizB

rich744 said:

I'm afraid there's a cult of DB scheme supporters here. I see your predicament and empathise. 

Sympathies are all well and good, but there's still no evidence to suggest that the advice the OP received was wrong.

Marcon

coopsy0 said:

The value of your pension is increasing the closer you get to 60. 

So let me get this right.  My intent is to remove my fund from the DB at some point to allow me to retire early. I dont want a high pension when I'm in my 80s and I want to leave whatever is left to my family when I pass, the DB fund does not allow that.   6 months ago the CETV was 960K and now 6 months I'm closer to 60, the CETV is 690K and that's increasing?????  

Your transfer value has decreased, but the pension payable from your DB scheme increases each year until you draw your benefits from it.

If you take maximum tax free cash from your DB scheme when you draw your benefits, that should go a long way towards meeting your objectives.

[Deleted User]

Sunnylifeover50plan said:

Albermarle said:

Sunnylifeover50plan said:

Albermarle said

By the way if you had transferred out the £960K 6 months ago and put it in a DC pension, it would have lost about 20% in value by now ( 10% investment loss and 10% inflation loss) . Many people with DC pensions are sweating that their investments have been  going down/not guaranteed /not inflation linked.
Probably many are wishing they were in a DB scheme...........

Some of the funds I bought into in Q1 are now in the black by a percent or two. Yes there's inflation but you can't say fund performance would have been 10% down.

If you look at the first 6 months of 2022, then you could be easily be 20% down if you were fully invested in US stock market, or maybe even some UK gilts/bonds, Then minus 10% inflation on top.
For sure if you had picked a better portfolio later in Q1 , after a lot of the drop happened, and were benefitting from a good July, it would look better.
Most medium risk portfolios will be down a few per cent still this year, even with the recent uptick. Then minus inflation.
The well known and popular Scottish Mortgage Trust, is still 30% down this year . Then minus inflation.

I checked my trades and buying in both February and March the investments are in the black. As I said inflation numbers are out there but you can't say that the OP would have lost 10% on the money he would have invested. Not least given you don't know what he would have invested in. That was my point.

Yes I'm down still on earlier investment points but that isn't really relevant given the OP's timelines.

Not sure how this is relevant. Looking at the past, one can ALWAYS pick a fund and a time period with wonderful gains. What’s that got to do with the original advice being inappropriate?  Surely you are not expecting anyone in the world to be able to know in advance various funds’ returns over the next 6 months? 

[Deleted User]

rich744 said:

I'm afraid there's a cult of DB scheme supporters here. I see your predicament and empathise. 

DB pensions and liquid investments both have a role.  The issue here is that the claim of malpractice appears to be completely baseless. 

Sunnylifeover50plan

Deleted_User said:

Sunnylifeover50plan said:

Albermarle said:

Sunnylifeover50plan said:

Albermarle said

By the way if you had transferred out the £960K 6 months ago and put it in a DC pension, it would have lost about 20% in value by now ( 10% investment loss and 10% inflation loss) . Many people with DC pensions are sweating that their investments have been  going down/not guaranteed /not inflation linked.
Probably many are wishing they were in a DB scheme...........

Some of the funds I bought into in Q1 are now in the black by a percent or two. Yes there's inflation but you can't say fund performance would have been 10% down.

If you look at the first 6 months of 2022, then you could be easily be 20% down if you were fully invested in US stock market, or maybe even some UK gilts/bonds, Then minus 10% inflation on top.
For sure if you had picked a better portfolio later in Q1 , after a lot of the drop happened, and were benefitting from a good July, it would look better.
Most medium risk portfolios will be down a few per cent still this year, even with the recent uptick. Then minus inflation.
The well known and popular Scottish Mortgage Trust, is still 30% down this year . Then minus inflation.

I checked my trades and buying in both February and March the investments are in the black. As I said inflation numbers are out there but you can't say that the OP would have lost 10% on the money he would have invested. Not least given you don't know what he would have invested in. That was my point.

Yes I'm down still on earlier investment points but that isn't really relevant given the OP's timelines.

Not sure how this is relevant. Looking at the past, one can ALWAYS pick a fund and a time period with wonderful gains. What’s that got to do with the original advice being inappropriate?  Surely you are not expecting anyone in the world to be able to know in advance various funds’ returns over the next 6 months? 

It isn't relevant to the OP, in the same way that one could say with certainty that his hypothetical investment choice would have gone down by 10% over the last 6 months.

coopsy0

I guess that all of you that suggest that a claim is baseless is correct in this case and tbh I had no intention of pursuing one.  I suppose the main point of it is that due to all the historical issues around DB transfers it is evident to me, that IFAs now just default on the side of advising against a transfer whether it is in the clients best interest or not.  I fully understood the risks in taking the money out of the DB scheme and the IFA was under no illusion that I would at some point wish to take it out to allow for early retirement and provide a legacy for my family in the event of my death, my DB scheme dies with me.  Although I was made aware of the benefits of a DB scheme and the risks in transferring it, I was clear to the IFA my reasons for doing it.  His advice at the time was to stay put "where is it safeguarded" as I was not intending to use it at that time.  What was never made clear to me that there was a potential for the CETV to reduce by what is over 25%.  I have seen all the comments about how could he foresee what would happen to affect the CETV but the same could be said for how is he expected to foresee what could happen top the market if the fund was invested.  At the time I was being offered 40x my pensionable salary which by anyone's opinion is a pretty good deal, now I am being offered 27x and most people seem to believe this was good advice.
From what I can see, it is now virtually impossible to get advice on a DB pension transfer as the IFA is going to default on the side of caution whereby he has no accountability.  That to me is not advice!