Insistent client pension transfer

dunstonh

Marcon said:

dunstonh said:

Pity OP didn't give it a try for themself. I presume they haven't or they would have come back to confirm the outcome - which I would expect to be that they are now the happy owner of a stakeholder pension bought direct.

I personally doubt it due to the way all the remaining open stakeholders are put in place via intermediaries.

A J Bell could make a commercial decision to stop accepting DB transfers into their SIPP against advice, and did so in 2021 - the last SIPP provider to take such a step.
Stakeholder pension providers have never had a similar option; they have to accept such transfers regardless. The issue is legal, not commercial, for them.

However, that is not well known and providers have done many things over the years against their own terms and only realised it later when someone pointed it out.

Aviva's Target Market Statement issued in 2018 (aimed at advisers but readily available to anyone who looks on their website) confirms their stakeholder pension is aimed at various groups, including those 'wanting access to pension freedoms'. They also confirm the product can be sold with or without advice, and can be sold face to face by an intermediary or direct on request from Aviva.

They have to make a prod disclosure for the product.  The product may be able to be sold without advice but it still goes through their agency. Which gives them the right to block it.   And none of what they have said alludes to DB transfers. 

The discussions on stakeholder pensions have taken place on many threads over a number of years now but as of yet, not one person has posted a success story by doing it.  Including those that were told to give stakeholders a go.   It may work for someone but given the lack of success stories, I remain on guard.



 

Read the application form and speak to Aviva. I've done both.

So, you have had someone from Aviva confirm that they will accept a DB transfer in on their stakeholder pension without an adviser being involved?

Marcon

dunstonh said:

Marcon said:

dunstonh said:

Pity OP didn't give it a try for themself. I presume they haven't or they would have come back to confirm the outcome - which I would expect to be that they are now the happy owner of a stakeholder pension bought direct.

I personally doubt it due to the way all the remaining open stakeholders are put in place via intermediaries.

A J Bell could make a commercial decision to stop accepting DB transfers into their SIPP against advice, and did so in 2021 - the last SIPP provider to take such a step.
Stakeholder pension providers have never had a similar option; they have to accept such transfers regardless. The issue is legal, not commercial, for them.

However, that is not well known and providers have done many things over the years against their own terms and only realised it later when someone pointed it out.

Aviva's Target Market Statement issued in 2018 (aimed at advisers but readily available to anyone who looks on their website) confirms their stakeholder pension is aimed at various groups, including those 'wanting access to pension freedoms'. They also confirm the product can be sold with or without advice, and can be sold face to face by an intermediary or direct on request from Aviva.

They have to make a prod disclosure for the product.  The product may be able to be sold without advice but it still goes through their agency. Which gives them the right to block it.   And none of what they have said alludes to DB transfers. 

The discussions on stakeholder pensions have taken place on many threads over a number of years now but as of yet, not one person has posted a success story by doing it.  Including those that were told to give stakeholders a go.   It may work for someone but given the lack of success stories, I remain on guard.



 

Read the application form and speak to Aviva. I've done both.

So, you have had someone from Aviva confirm that they will accept a DB transfer in on their stakeholder pension without an adviser being involved?

To avoid confusing anyone reading this thread, an adviser has to be involved if the transfer is from a DB scheme or other scheme with safeguarded rights and is £30,000+. The ceding scheme can't release the transfer without evidence that the member has received the necessary advice. 

Aviva have confirmed they will accept a direct application from a customer for a stakeholder pension. Their stakeholder will accept a DB transfer even if the advice is not to transfer. An individual can arrange the transfer themself. That's assuming they can cope with the string of questions on the application form - my comment, not Aviva's!

You've said the following: 'The product may be able to be sold without advice but it still goes through their agency. Which gives them the right to block it.' Out of interest (and genuine bafflement), why would they want to block it, unless there is something clearly dodgy about the application e.g. they suspect money laundering? Stakeholder legislation has always required the provider to accept transfers from any UK registered pension scheme, so they don't have the same commercial risks , or indeed options, as non-stakeholder providers. 

Malthusian

Marcon said: 

Read the application form and speak to Aviva. I've done both.

Which means after a good few years of us musing about the possibility of getting round the "insistent client" regime by opening a stakeholder pension on a direct-to-consumer basis, we're still in the position that nobody has reported successfully managing it.
If I really wanted to prove this was possible I'd seriously consider using £16 of my own money to open one just for the satisfaction of winning an argument on t'Internet. (I'm taking a pass myself as I don't have enough interest.)

Marcon said:

You've said the following: 'The product may be able to be sold without advice but it still goes through their agency. Which gives them the right to block it.' Out of interest (and genuine bafflement), why would they want to block it, unless there is something clearly dodgy about the application e.g. they suspect money laundering? 

Because the only possible reason that anyone would want to open a Stakeholder Pension in 2023 is that they want to transfer in a DB pension after being advised not to, which Aviva - like every single other pension provider - doesn't want to be involved with?

dunstonh

Aviva have confirmed they will accept a direct application from a customer for a stakeholder pension. Their stakeholder will accept a DB transfer even if the advice is not to transfer. An individual can arrange the transfer themself. That's assuming they can cope with the string of questions on the application form - my comment, not Aviva's!

So, I ask again,   has Aviva verified that they will accept a transfer in on a DB scheme without an adviser processing it via their agency?

Virtually all pensions will accept a transfer in if the advice is not to transfer as long as the pension goes through the adviser firm agency.  

You've said the following: 'The product may be able to be sold without advice but it still goes through their agency. Which gives them the right to block it.' Out of interest (and genuine bafflement), why would they want to block it, unless there is something clearly dodgy about the application e.g. they suspect money laundering? Stakeholder legislation has always required the provider to accept transfers from any UK registered pension scheme, so they don't have the same commercial risks , or indeed options, as non-stakeholder providers. 

Aviva retail their stakeholder product through an agency system.   The agent that the stakeholder pension is processed through takes liability for that transaction whether it is advised or not.   So, if Aviva put it through their own agency team, they are taking on liability for that transaction.  If an IFA puts it through their agency, they take on liability for that transaction.

The product and the distribution are two separate things.   They would have no liability on the product side but they would carry liability on the distribution side.   

Advisers have been told not to accept insistent clients, and most providers have followed suit.    Largely on the fear that the regulator has said that transactions should not be carried out if you have reason to believe they may not be in the consumer's best interests.    The FOS has upheld some complaints against providers that allowed the facilitation of a transaction that turned out to be unsuitable.    So, its a fear of liability on the distribution side.

I understand where you are coming from, but the fact that we have seen no success stories despite the number of insistent posters on here that they want to do it makes me believe that it is either untested or there have been rejections.    I think (but it could be memory playing up) that someone did say they tried Standard Life's stakeholder but were refused.

Pat38493

Maybe this is a silly question, but I thought that a stakeholder pension is a kind of DB type pension in itself, so why would you want to jump through all these hoops to transfer from one scheme to another which both have guaranteed benefits?

xylophone

I thought that a stakeholder pension is a kind of DB type pension in itself, 

What makes you think that a stakeholder pension is a Defined Benefits Scheme?

https://www.pensionbee.com/pensions-explained/pension-types/what-is-a-stakeholder-pension

A stakeholder pension is a type of defined contribution pension, which has a retirement value based on the amount you pay in and how your investments perform over time. 

Pat38493

xylophone said:

I thought that a stakeholder pension is a kind of DB type pension in itself, 

What makes you think that a stakeholder pension is a Defined Benefits Scheme?

https://www.pensionbee.com/pensions-explained/pension-types/what-is-a-stakeholder-pension

A stakeholder pension is a type of defined contribution pension, which has a retirement value based on the amount you pay in and how your investments perform over time. 

Yes sorry about that I had misread a different article about it.

So the wheeze is that if you did this successfully, you could then simply turn round and transfer the stakeholder pension into a SIPP?  But so far nobody has posted saying that they have successfully done this (leaving aside whether it's even a good idea or not)?

dunstonh

Pat38493 said:

xylophone said:

I thought that a stakeholder pension is a kind of DB type pension in itself, 

What makes you think that a stakeholder pension is a Defined Benefits Scheme?

https://www.pensionbee.com/pensions-explained/pension-types/what-is-a-stakeholder-pension

A stakeholder pension is a type of defined contribution pension, which has a retirement value based on the amount you pay in and how your investments perform over time. 

Yes sorry about that I had misread a different article about it.

So the wheeze is that if you did this successfully, you could then simply turn round and transfer the stakeholder pension into a SIPP?  But so far nobody has posted saying that they have successfully done this (leaving aside whether it's even a good idea or not)?

The theory is that there are no safeguarded benefits once the money is in the stakeholder pension.  So, its free to move to any other pension you like.   But we have not seen any evidence of anyone successfully using a stakeholder pension this way.   And there are only 4 stakeholder pensions theoretically open for new business (according to Defaqto).

xylophone

I had a look at the updated information on the Prudential site

https://www.mandg.com/pru/adviser/en-gb/insights-events/insights-library/transfer-pension-scheme?utm_source=legacyurls&utm_medium=301&utm_campaign=/knowledge-literature/knowledge-library/transfer-pension-scheme/

And still it states

However, although most schemes provide the right to transfer, not every scheme has to accept an incoming transfer.

A stakeholder pension scheme is currently the only type of scheme which must accept any transfer from another registered pension scheme.

The Pru had its own stakeholder -  Marcon's post refers

https://forums.moneysavingexpert.com/discussion/6301726/confirmed-stakeholder-pension-which-accepts-insistent-clients-and-offers-drawdown#latest

I was doing some late night browsing, remembered that the Pru's knowledge library had long said stakeholders had to accept all transfers, found their form and precisely because it was dated 08/21 thought that meant they were open to new business. Hence my happy post...urgh. Thank you for putting me right. I'll change the title on the thread.

They have confirmed that they accept DB transfers for existing stakeholder customers (and need to know if someone has received advice from a financial adviser) but I appreciate that's not much help for  anyone who doesn't have a stakeholder with them.

So again we go round the issue - it appears that the Aviva stakeholder is still available direct to a customer - not sure what the current situation is with regard to Standard Life.

https://www.standardlife.co.uk/pensions/personal-pension/stakeholder

If a customer can simply fill in a form/make a phone call, then it would seem that he will end up with a stakeholder pension.

He is not compelled to tell the stakeholder provider that he wants it as a vehicle for a DB pension transfer.

With regard to any DB pension he might have and wish to transfer out, then clearly if valued at higher than £30,000, he is  compelled to take the advice of a Pension Transfer Specialist.

He is not compelled to follow it.

If the stakeholder provider is compelled by law to accept any transfer from a registered pension scheme, then the way should be clear.... 

But we have never been given any evidence from anybody who has succeeded?

Malthusian

Pat38493 said:

So the wheeze is that if you did this successfully, you could then simply turn round and transfer the stakeholder pension into a SIPP?  But so far nobody has posted saying that they have successfully done this (leaving aside whether it's even a good idea or not)?

That is correct. If you got the CETV into a stakeholder pension then there is no problem transferring it to a SIPP. That's just a bog-standard DC to DC transfer and no liability can possibly rest with the SIPP provider.
There are, in theory, two hurdles:
#2 The provider of the stakeholder pension has to be compelled to accept the transfer. As xylophone and others have pointed out, in theory they can't legally refuse. I still think this hurdle is non-trivial; there is a high chance the stakeholder pension provider would initially refuse to process the transfer and you would have to go down the formal complaint route, maybe even go to the Ombudsman, before they gave in. Anecdotally, I have heard of exactly this happening in the pre-pension-freedom era when someone was trying to transfer a DB pension (back when you didn't need advice to do so) into a workplace stakeholder.
It is not even guaranteed they would give in; laws are subject to interpretation and the Ombudsman isn't even compelled to follow the law. If an Ombudsman decides that the requirement to act in the consumer's best interests overrides a very obscure provision in an obsolete pension law (or some similar contortion) then you are stuck unless you're prepared to go to judicial review.
#1 The provider of the stakeholder pension can simply refuse to set up the stakeholder pension in the first place. This is likely where the real hurdle is. It is unambiguous that you can't force a pension provider to set up a product for you, even if their website says this and their front line call centre staff say the other. We have had zero reports of someone using the stakeholder pension wheeze successfully and zero reports of "I managed to open a stakeholder pension with £16 gross but the pension provider is refusing to accept the DB transfer despite being legally required to".