Poor pension advice

HappyHarry

ader42 said:

I suspect the IFA ignored the real question being asked and answered “if it should be transferred (at all, ever) ?” and not the question being asked = “when” - as in “is now an okay time to do it?”

With the best will in  the world, no Pension Transfer Specialist is ever going to answer that question.  

To get an answer to that, you would need a clairvoyant, though I am not sure where you would find a regulated one.

artyboy

ader42 said:

I do feel for the OP and others in their position.

If it was me and I clearly stated to an IFA that I was going to retire transfer the funds to a SIPP within the next couple of years, and I asked if now was a good time to action that transfer I would have expected the IFA to say yes now would be a good time.

40X is a good valuation for a retirement pot and the timescale as to when to do this (not if, when) being considered is very short in retirement terms - roughly 24 months from that point? The longer that timescale for transfer the less likely should be a yes imho.

I suspect the IFA ignored the real question being asked and answered “if it should be transferred (at all, ever) ?” and not the question being asked = “when” - as in “is now an okay time to do it?”

I would feel aggrieved too. I’m so glad I transferred all my pensions to a SIPP as soon as I was allowed. 

Regardless of the question being asked, their advice/recommendation will be based on the overarching question of whether the transfer is in the client's best interests based on the advisors understanding of their overall financial position.

And when it comes to transferring a guaranteed, lifelong, index linked income (often with other benefits); for a pot of cash that could be invested wisely, but could also be frittered away - then it's understandable that the bar will be set very high for a positive recommendation.

I've read a number of these posts over the years and positive recommendations tend to come when someone really doesn't need the DB income - either because they or their partner already have a separate DB pension, or because they have very significant other assets/wealth that makes the DB only a small part of the income equation.

dunstonh

If it was me and I clearly stated to an IFA that I was going to retire transfer the funds to a SIPP within the next couple of years, and I asked if now was a good time to action that transfer I would have expected the IFA to say yes now would be a good time.

Not a question that an adviser can answer without a bunch of what ifs.    CETVs rose virtually every year from 2009 through to 2021.   There was no way to predict that.  Indeed, going back to 2010, people were predicting gilts yields would fall and they didn't. 

I suspect the IFA ignored the real question being asked and answered “if it should be transferred (at all, ever) ?” and not the question being asked = “when” - as in “is now an okay time to do it?”

An adviser can only look at the situation now with their available data.  That pension could be in the PPF later.  Or there may be enhancements given later that are not present earlier.  Gilt yields could have continued to fall (there was a threat of stagflation not too long ago or gilt yields could rise - as has happened).     Nobody knows enough about the future to answer that question reliably.   Effectively, the answer given is should I transfer this now and the answer is yes/no.

It is also worth noting that the OP says this was about 6 months ago.  So, it is quite possible, that even if the advice had been to transfer it, a second CETV would be required and the value would have already dropped by then. A scenario we have seen posters on here say happened to them.     6 months ago is February and CETVs were already falling (Feb CETVs were down around 10%.  January were about the same they were 12 months earlier). So, if this CETV had not fallen yet, it would likely be one that was already a month or two old.

coopsy0

ader42 said:

I suspect the IFA ignored the real question being asked and answered “if it should be transferred (at all, ever) ?” and not the question being asked = “when” - as in “is now an okay time to do it?”

With the best will in  the world, no Pension Transfer Specialist is ever going to answer that question.  

To get an answer to that, you would need a clairvoyant, though I am not sure where you would find a regulated one.

I'll be honest, I have some sympathy for IFAs as they are damned if they do and damned if they dont.  But, his advice to me was to leave the pension where it is.  However, he caveated that by stating that if I were in a position where I was looking to retire in the very near future, his advice may be different.  He stated that the CETV was likely to increase the closer I got to 60 as I become more of a liability to the fund and should contact him again in the future when ready to retire.
It can be subjective whether to remain in was the correct advice at the time or ever, but, whilst I appreciate he did not have a crystal ball, what he told me was, at best, mis-judged.

jimpwarsop

coopsy0 said:

About 6 months ago I obtained advice regarding a potential DB pension transfer.  At the time the advice was to leave it in the DB scheme.  Fair enough and I took said advice.  I am able to see my transfer value at all times and currently my transfer value is more than 250K less than it was when I took the advice.  Do I have any claim for poor advice in this matter.

would that be before a war broke out ?

dunstonh

It can be subjective whether to remain in was the correct advice at the time or ever, but, whilst I appreciate he did not have a crystal ball, what he told me was, at best, mis-judged.

Can you give us a copy and paste of what it actually says in the report about leaving it and it going up?
Also are there any risk warnings in the report that cover the fact that the future is unknown (or words like that)?

Albermarle

I've read a number of these posts over the years and positive recommendations tend to come when someone really doesn't need the DB income - either because they or their partner already have a separate DB pension, or because they have very significant other assets/wealth that makes the DB only a small part of the income equation.

That's a good summary. The best way to get a positive DB transfer recommendation, is when you do not really need the money in the first place !

[Deleted User]

However, he caveated that by stating that if I were in a position where I was looking to retire in the very near future, his advice may be different

This a dumb thing to say (fishing for repeat business?) but I presume he didn’t put that in writing. And even if he did, does not make the actual recommendation wrong.