Defined Benefit Transfer

Apologies if I have missed a thread or section. I think my question is quite simple but trying to find the answer is proving otherwise.

I have a single DB pension (all the rest are DC) the will pay out around £2400 p.a. - I'm waiting on a CETV but I believe it will be around £90k which means I am FORCED to seek IFA input.

I know exactly where I want to invest my CETV so I don't need an advisor but I have to have one. I fully understand the risks and I am happy with what I plan to do with the funds.

The issue I have is that I have to go through the process of IFA and it's confusing what that involves. I'm also in a position where I have limited funds currently but am keen to move as I have no control or flexibility with the fund as it currently stands.

The issue is that so many IFAs either don't advertise their charges or seem to have an annual fee. I don't understand the annual fee element as I know where I want to invest and i don't need an IFA managing my fund. I also don't have £900 - £5000 that I've been seeing as the fee.

In my mind, this is a simple consulation. I get that I'm walking away from a guaranteed £2k annually. I get that my partner would get half that if I die. I have a choice, take the £2k annual or take £90k and invest it in the hope I can get a better position. I am 99.9% certain I can improve my position and 100% convinced that they cant so I'm confused why I would need to pay ongoing charges.

What am I missing? Why can't I simply get a report that says we advise this and I absolve them of liability and say...I'm doing this. I don't see where £900 or up to £5k is getting spent. This surely is a £300-£500 report and my decision?!!

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Comments

  • Marcon
    Marcon Posts: 10,524 Forumite
    First Post First Anniversary Name Dropper Combo Breaker
    IJJoseph said:
    Apologies if I have missed a thread or section. I think my question is quite simple but trying to find the answer is proving otherwise.

    I have a single DB pension (all the rest are DC) the will pay out around £2400 p.a. - I'm waiting on a CETV but I believe it will be around £90k which means I am FORCED to seek IFA input.

    I know exactly where I want to invest my CETV so I don't need an advisor but I have to have one. I fully understand the risks and I am happy with what I plan to do with the funds.


    Are you sure the destination you have in mind will accept the transfer if, as is highly likely, the adviser recommends you stay put?

    IJJoseph said:

    In my mind, this is a simple consulation. I get that I'm walking away from a guaranteed £2k annually. I get that my partner would get half that if I die. I have a choice, take the £2k annual or take £90k and invest it in the hope I can get a better position. I am 99.9% certain I can improve my position and 100% convinced that they cant so I'm confused why I would need to pay ongoing charges.

    What am I missing? Why can't I simply get a report that says we advise this and I absolve them of liability and say...I'm doing this. I don't see where £900 or up to £5k is getting spent. This surely is a £300-£500 report and my decision?!!

    What is a simple consultation to you is a massive deal for any adviser willing to take your case, always assuming you can find someone willing to do so. They acquire a lifetime of liability and their PI premiums reflect this. Expect to pay upwards of £5K - and thank the FCA for imposing such strictures on advisers that this is the result.
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • dunstonh
    dunstonh Posts: 116,229 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    I'm waiting on a CETV but I believe it will be around £90k which means I am FORCED to seek IFA input.
    That CETV would probably have been around £200k 18 months ago.  CETVs are  now just over half what they were then.  Or perhaps if you had a quote from around 18 months ago that was circa £90k, it would now be around £40k.

    I know exactly where I want to invest my CETV so I don't need an advisor but I have to have one. I fully understand the risks and I am happy with what I plan to do with the funds.
    Are you sure?   Someone doing a DB transfer nowadays is rare.  Especially if the only reason is to invest it as its unlikely that the investments will do well enough.

    The issue I have is that I have to go through the process of IFA and it's confusing what that involves. I'm also in a position where I have limited funds currently but am keen to move as I have no control or flexibility with the fund as it currently stands.
    You dont need control or flexibility with a DB pension as its nicely defined with no risks.

    The issue is that so many IFAs either don't advertise their charges or seem to have an annual fee. I don't understand the annual fee element as I know where I want to invest and i don't need an IFA managing my fund. I also don't have £900 - £5000 that I've been seeing as the fee.
    The annual fee is optional. 

    A fee for DB transfer is likely to be in the £5k to £10k range and pretty much going to result in advice that says it is unsuitable (the reasons you have given on this thread are not justified reasons)

    In my mind, this is a simple consulation.Its not

    I get that I'm walking away from a guaranteed £2k annually. I get that my partner would get half that if I die. I have a choice, take the £2k annual or take £90k and invest it in the hope I can get a better position. I am 99.9% certain I can improve my position and 100% convinced that they cant so I'm confused why I would need to pay ongoing charges.When was that £2k figure last updated?

    What am I missing?a) you don't have the CETV but you are confident you can make more.  Without the CETV that is impossible to say
    b) you are extremely confident of your ability yet statistically, based on current CETVs, its more likely that you will fail to do better in 90% of cases.

    Why can't I simply get a report that says we advise this and I absolve them of liability and say...I'm doing this. I don't see where £900 or up to £5k is getting spent. This surely is a £300-£500 report and my decision?!!The law does not allow you to waive your rights.     People that do not know what they are doing are not in a position to waive taway protection that exists.

    £300-£500 is laughable for such a high risk transaction.  That would bankrupt adviser firms very quickly.








    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • IJJoseph
    IJJoseph Posts: 87 Forumite
    First Post First Anniversary Combo Breaker
    Marcon said:
    IJJoseph said:
    Apologies if I have missed a thread or section. I think my question is quite simple but trying to find the answer is proving otherwise.

    I have a single DB pension (all the rest are DC) the will pay out around £2400 p.a. - I'm waiting on a CETV but I believe it will be around £90k which means I am FORCED to seek IFA input.

    I know exactly where I want to invest my CETV so I don't need an advisor but I have to have one. I fully understand the risks and I am happy with what I plan to do with the funds.


    Are you sure the destination you have in mind will accept the transfer if, as is highly likely, the adviser recommends you stay put?

    IJJoseph said:

    In my mind, this is a simple consulation. I get that I'm walking away from a guaranteed £2k annually. I get that my partner would get half that if I die. I have a choice, take the £2k annual or take £90k and invest it in the hope I can get a better position. I am 99.9% certain I can improve my position and 100% convinced that they cant so I'm confused why I would need to pay ongoing charges.

    What am I missing? Why can't I simply get a report that says we advise this and I absolve them of liability and say...I'm doing this. I don't see where £900 or up to £5k is getting spent. This surely is a £300-£500 report and my decision?!!

    What is a simple consultation to you is a massive deal for any adviser willing to take your case, always assuming you can find someone willing to do so. They acquire a lifetime of liability and their PI premiums reflect this. Expect to pay upwards of £5K - and thank the FCA for imposing such strictures on advisers that this is the result.

    Yes - I know they'll accept the funds...and i understand the liability aspect and am quite prepared to absolve them of that liabilty...thanks for your input
  • Marcon
    Marcon Posts: 10,524 Forumite
    First Post First Anniversary Name Dropper Combo Breaker
    edited 12 August 2023 at 11:38PM
    IJJoseph said:
    Marcon said:
    IJJoseph said:
    Apologies if I have missed a thread or section. I think my question is quite simple but trying to find the answer is proving otherwise.

    I have a single DB pension (all the rest are DC) the will pay out around £2400 p.a. - I'm waiting on a CETV but I believe it will be around £90k which means I am FORCED to seek IFA input.

    I know exactly where I want to invest my CETV so I don't need an advisor but I have to have one. I fully understand the risks and I am happy with what I plan to do with the funds.


    Are you sure the destination you have in mind will accept the transfer if, as is highly likely, the adviser recommends you stay put?

    IJJoseph said:

    In my mind, this is a simple consulation. I get that I'm walking away from a guaranteed £2k annually. I get that my partner would get half that if I die. I have a choice, take the £2k annual or take £90k and invest it in the hope I can get a better position. I am 99.9% certain I can improve my position and 100% convinced that they cant so I'm confused why I would need to pay ongoing charges.

    What am I missing? Why can't I simply get a report that says we advise this and I absolve them of liability and say...I'm doing this. I don't see where £900 or up to £5k is getting spent. This surely is a £300-£500 report and my decision?!!

    What is a simple consultation to you is a massive deal for any adviser willing to take your case, always assuming you can find someone willing to do so. They acquire a lifetime of liability and their PI premiums reflect this. Expect to pay upwards of £5K - and thank the FCA for imposing such strictures on advisers that this is the result.

    Yes - I know they'll accept the funds...and i understand the liability aspect and am quite prepared to absolve them of that liabilty...thanks for your input
    So you've got a stakeholder pension set up to accept the transfer (currently the only type of pension willing to accept DB transfers against advice)?

    You can't absolve the adviser of liability, however willing you are (and eager they would be!). Do you have an adviser lined up who is prepared to take your case and can guarantee to jump through all the hoops within the 3 month guarantee period which applies to a CETV? If you haven't, don't wait until the CETV lands on your doormat - the adviser will need the full period if they are to have any chance of meeting the statutory deadlines.
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • IJJoseph
    IJJoseph Posts: 87 Forumite
    First Post First Anniversary Combo Breaker
    dunstonh said:
    I'm waiting on a CETV but I believe it will be around £90k which means I am FORCED to seek IFA input.
    That CETV would probably have been around £200k 18 months ago.  CETVs are  now just over half what they were then.  Or perhaps if you had a quote from around 18 months ago that was circa £90k, it would now be around £40k.

    I know exactly where I want to invest my CETV so I don't need an advisor but I have to have one. I fully understand the risks and I am happy with what I plan to do with the funds.
    Are you sure?   Someone doing a DB transfer nowadays is rare.  Especially if the only reason is to invest it as its unlikely that the investments will do well enough.

    The issue I have is that I have to go through the process of IFA and it's confusing what that involves. I'm also in a position where I have limited funds currently but am keen to move as I have no control or flexibility with the fund as it currently stands.
    You dont need control or flexibility with a DB pension as its nicely defined with no risks.

    The issue is that so many IFAs either don't advertise their charges or seem to have an annual fee. I don't understand the annual fee element as I know where I want to invest and i don't need an IFA managing my fund. I also don't have £900 - £5000 that I've been seeing as the fee.
    The annual fee is optional. 

    A fee for DB transfer is likely to be in the £5k to £10k range and pretty much going to result in advice that says it is unsuitable (the reasons you have given on this thread are not justified reasons)

    In my mind, this is a simple consulation.Its not

    I get that I'm walking away from a guaranteed £2k annually. I get that my partner would get half that if I die. I have a choice, take the £2k annual or take £90k and invest it in the hope I can get a better position. I am 99.9% certain I can improve my position and 100% convinced that they cant so I'm confused why I would need to pay ongoing charges.
    When was that £2k figure last updated?

    What am I missing?
    a) you don't have the CETV but you are confident you can make more.  Without the CETV that is impossible to say
    b) you are extremely confident of your ability yet statistically, based on current CETVs, its more likely that you will fail to do better in 90% of cases.

    Why can't I simply get a report that says we advise this and I absolve them of liability and say...I'm doing this. I don't see where £900 or up to £5k is getting spent. This surely is a £300-£500 report and my decision?!!The law does not allow you to waive your rights.     People that do not know what they are doing are not in a position to waive taway protection that exists.

    £300-£500 is laughable for such a high risk transaction.  That would bankrupt adviser firms very quickly.








    WOW - clearly you're a fan of the industry.


  • Aretnap
    Aretnap Posts: 5,196 Forumite
    First Anniversary Name Dropper First Post
    IJJoseph said:
    Marcon said:
    IJJoseph said:
    Apologies if I have missed a thread or section. I think my question is quite simple but trying to find the answer is proving otherwise.

    I have a single DB pension (all the rest are DC) the will pay out around £2400 p.a. - I'm waiting on a CETV but I believe it will be around £90k which means I am FORCED to seek IFA input.

    I know exactly where I want to invest my CETV so I don't need an advisor but I have to have one. I fully understand the risks and I am happy with what I plan to do with the funds.


    Are you sure the destination you have in mind will accept the transfer if, as is highly likely, the adviser recommends you stay put?

    IJJoseph said:

    In my mind, this is a simple consulation. I get that I'm walking away from a guaranteed £2k annually. I get that my partner would get half that if I die. I have a choice, take the £2k annual or take £90k and invest it in the hope I can get a better position. I am 99.9% certain I can improve my position and 100% convinced that they cant so I'm confused why I would need to pay ongoing charges.

    What am I missing? Why can't I simply get a report that says we advise this and I absolve them of liability and say...I'm doing this. I don't see where £900 or up to £5k is getting spent. This surely is a £300-£500 report and my decision?!!

    What is a simple consultation to you is a massive deal for any adviser willing to take your case, always assuming you can find someone willing to do so. They acquire a lifetime of liability and their PI premiums reflect this. Expect to pay upwards of £5K - and thank the FCA for imposing such strictures on advisers that this is the result.

    Yes - I know they'll accept the funds...and i understand the liability aspect and am quite prepared to absolve them of that liabilty...thanks for your input
    If you did understand the liability aspect you would understand that you cannot absolve them of liability, whether or not you would be prepared to do so. They're the expert after all - you're not. It doesn't matter what you say or sign - if a few years down the line you decide you were given bad advice you will still be able to make a complaint any potentially hold them liable for the loss of your valuable DB pension.

    (This potentially applies by the way even if the advice is not to transfer - there was one case a while ago where a complaint against an adviser was upheld because he didn't advise strongly enough against a transfer into a scheme which turned out to be a scam.)


  • IJJoseph
    IJJoseph Posts: 87 Forumite
    First Post First Anniversary Combo Breaker
    Marcon said:
    IJJoseph said:
    Marcon said:
    IJJoseph said:
    Apologies if I have missed a thread or section. I think my question is quite simple but trying to find the answer is proving otherwise.

    I have a single DB pension (all the rest are DC) the will pay out around £2400 p.a. - I'm waiting on a CETV but I believe it will be around £90k which means I am FORCED to seek IFA input.

    I know exactly where I want to invest my CETV so I don't need an advisor but I have to have one. I fully understand the risks and I am happy with what I plan to do with the funds.


    Are you sure the destination you have in mind will accept the transfer if, as is highly likely, the adviser recommends you stay put?

    IJJoseph said:

    In my mind, this is a simple consulation. I get that I'm walking away from a guaranteed £2k annually. I get that my partner would get half that if I die. I have a choice, take the £2k annual or take £90k and invest it in the hope I can get a better position. I am 99.9% certain I can improve my position and 100% convinced that they cant so I'm confused why I would need to pay ongoing charges.

    What am I missing? Why can't I simply get a report that says we advise this and I absolve them of liability and say...I'm doing this. I don't see where £900 or up to £5k is getting spent. This surely is a £300-£500 report and my decision?!!

    What is a simple consultation to you is a massive deal for any adviser willing to take your case, always assuming you can find someone willing to do so. They acquire a lifetime of liability and their PI premiums reflect this. Expect to pay upwards of £5K - and thank the FCA for imposing such strictures on advisers that this is the result.

    Yes - I know they'll accept the funds...and i understand the liability aspect and am quite prepared to absolve them of that liabilty...thanks for your input
    So you've got a stakeholder pension set up to accept the transfer (currently the only type of pension willing to accept DB transfers against advice)?

    You can't absolve the adviser of liability, however willing you are (and eager they would be!). Do you have an adviser lined up who is prepared to take your case and can guarantee to jump through all the hoops within the 3 month guarantee period which applies to a CETV? If you haven't, don't wait until the CETV lands on your doormat - the adviser will need the full period if they are to have any chance of meeting the statutory deadlines.

    This is the issue.

    I have had private pensions through every job. It's only this job (very early in my career and before I was financially aware) that I was in a final salary scheme. 6 years...that was it. I logged into the site to see an annual pension of £2k and asked for a transfer value (not confirmed because the site does a snapshot based on a point in time) which was around £90k. I've asked for a gauranteed value...which is what i'm waiting for.

    Even if i take £90k and don't get any growth....age 65 I can draw down 4% (p.a. declining) and shuffle off this mortal coil at age 85 with £39k in the bank.

    My DC schemes - I've opted out of the "default" option and have done very well and i'm happy to take that risk....it's served me well so far.
  • IJJoseph
    IJJoseph Posts: 87 Forumite
    First Post First Anniversary Combo Breaker
    Marcon said:
    IJJoseph said:
    Marcon said:
    IJJoseph said:
    Apologies if I have missed a thread or section. I think my question is quite simple but trying to find the answer is proving otherwise.

    I have a single DB pension (all the rest are DC) the will pay out around £2400 p.a. - I'm waiting on a CETV but I believe it will be around £90k which means I am FORCED to seek IFA input.

    I know exactly where I want to invest my CETV so I don't need an advisor but I have to have one. I fully understand the risks and I am happy with what I plan to do with the funds.


    Are you sure the destination you have in mind will accept the transfer if, as is highly likely, the adviser recommends you stay put?

    IJJoseph said:

    In my mind, this is a simple consulation. I get that I'm walking away from a guaranteed £2k annually. I get that my partner would get half that if I die. I have a choice, take the £2k annual or take £90k and invest it in the hope I can get a better position. I am 99.9% certain I can improve my position and 100% convinced that they cant so I'm confused why I would need to pay ongoing charges.

    What am I missing? Why can't I simply get a report that says we advise this and I absolve them of liability and say...I'm doing this. I don't see where £900 or up to £5k is getting spent. This surely is a £300-£500 report and my decision?!!

    What is a simple consultation to you is a massive deal for any adviser willing to take your case, always assuming you can find someone willing to do so. They acquire a lifetime of liability and their PI premiums reflect this. Expect to pay upwards of £5K - and thank the FCA for imposing such strictures on advisers that this is the result.

    Yes - I know they'll accept the funds...and i understand the liability aspect and am quite prepared to absolve them of that liabilty...thanks for your input
    So you've got a stakeholder pension set up to accept the transfer (currently the only type of pension willing to accept DB transfers against advice)?

    You can't absolve the adviser of liability, however willing you are (and eager they would be!). Do you have an adviser lined up who is prepared to take your case and can guarantee to jump through all the hoops within the 3 month guarantee period which applies to a CETV? If you haven't, don't wait until the CETV lands on your doormat - the adviser will need the full period if they are to have any chance of meeting the statutory deadlines.

    Not to accept DB no - that's something i need to understand and resolve. This pension is just a small part of my portfolio but dealing with the company managing it is so painful. I know I can grow the funds beyond what the DB value is and not dealing with the pain that is Mercer is just a bonus
  • IJJoseph
    IJJoseph Posts: 87 Forumite
    First Post First Anniversary Combo Breaker
    Aretnap said:
    IJJoseph said:
    Marcon said:
    IJJoseph said:
    Apologies if I have missed a thread or section. I think my question is quite simple but trying to find the answer is proving otherwise.

    I have a single DB pension (all the rest are DC) the will pay out around £2400 p.a. - I'm waiting on a CETV but I believe it will be around £90k which means I am FORCED to seek IFA input.

    I know exactly where I want to invest my CETV so I don't need an advisor but I have to have one. I fully understand the risks and I am happy with what I plan to do with the funds.


    Are you sure the destination you have in mind will accept the transfer if, as is highly likely, the adviser recommends you stay put?

    IJJoseph said:

    In my mind, this is a simple consulation. I get that I'm walking away from a guaranteed £2k annually. I get that my partner would get half that if I die. I have a choice, take the £2k annual or take £90k and invest it in the hope I can get a better position. I am 99.9% certain I can improve my position and 100% convinced that they cant so I'm confused why I would need to pay ongoing charges.

    What am I missing? Why can't I simply get a report that says we advise this and I absolve them of liability and say...I'm doing this. I don't see where £900 or up to £5k is getting spent. This surely is a £300-£500 report and my decision?!!

    What is a simple consultation to you is a massive deal for any adviser willing to take your case, always assuming you can find someone willing to do so. They acquire a lifetime of liability and their PI premiums reflect this. Expect to pay upwards of £5K - and thank the FCA for imposing such strictures on advisers that this is the result.

    Yes - I know they'll accept the funds...and i understand the liability aspect and am quite prepared to absolve them of that liabilty...thanks for your input
    If you did understand the liability aspect you would understand that you cannot absolve them of liability, whether or not you would be prepared to do so. They're the expert after all - you're not. It doesn't matter what you say or sign - if a few years down the line you decide you were given bad advice you will still be able to make a complaint any potentially hold them liable for the loss of your valuable DB pension.

    (This potentially applies by the way even if the advice is not to transfer - there was one case a while ago where a complaint against an adviser was upheld because he didn't advise strongly enough against a transfer into a scheme which turned out to be a scam.)



    I appreciate that - and fully understand the legal implications....just looking to move the funds out as soon as possible without getting tied to a company i don't want to be tied to or paying for advice that i don't need
  • Bimbly
    Bimbly Posts: 482 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
    It's the law.

    It's like asking if, instead of getting the state pension, can you have your money up front? You can't. That's it.

    This question gets asked a lot on this board, so you are not alone (although, not recently, due to plummeting CETV values). However, it is a risky transaction for the advisor and they have to pay a lot for insurance, so their costs are high. Regulations also state that they have to do a lot of work and research into your situation to offer advice. So it's expensive and figures of £5k for this advice have been mentioned.

    You cannot waive their liability for this advice. Again, this is the law.

    In order to transfer your pension, you need a provider willing to take it. If the advice you receive is not to transfer then you will struggle.

    Instead, perhaps you could look at it in a different way. You have a guaranteed income from your retirement date of £2,400 per year, rising with inflation (possibly subject to a cap). Using that as a basis, you can make plans with your other investments to meet your income needs in retirement. You probably didn't pay much money for this valuable deal, so take it as a bonus and move on.
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