Being forced to use a Financial Advisor to transfer pension to pension.

scoobyjones1

wjr4 said:

scoobyjones1 said:

MeteredOut said:

scoobyjones1 said:

MeteredOut said:

HappyHarry said:

scoobyjones1 said:

First IFA / PTS quote received. They want 5% of the CETV, so £3000 in this case. That's for the advice/work as they called it and no idea if they would approve the transfer or not. So could be money wasted. At least that would satisfy the DB holder that she had taken the correct advice and maybe then she could transfer into a stakeholder pension. However she is pretty adamant that £3k is way too much to pay...and they also said they would need 40 days. We will keep looking.

I think your wife may be disappointed if she is hoping for DB transfer advice for under £3000. That cost is lower than should be expected. 

40 days would be a long time if the IFA had all the required information on day 1. Unfortunately, what tends to happen is that the DB administrator does not send all necessary information to the IFA when requested, and there are then delays in getting the required information from the administrator. The 3 month deadline from the date of the CETV sounds a long time, but in reality it is frequently found to be quite a tight deadline due to delays in getting all the required information together.

Not sure why she'd be disappointed. From reading this thread, the expectation should be that the IFA will advise against the CETV transfer, but I'm sure at least one person said they can still take that advice to a SIPP provider and say "look, i've had advice, but I don't agree, I still want to transfer".

So, the OP is effectively paying to be able to do the transfer, so the cheapest he can get an IFA he can get to do that, the better.

No, the SIPP will not take the transfer against IFA advice.

All SIPP providers, or just your current one? I thought someone had said up-thread that it was the getting of the advice that was the blocker. I must admit, I do feel for you on this one - you're willing to accept the consequences of your your decisions and should be allowed to do so IMO.

I think all SIPP providers and certainly our one. I'm glad you see it, she has to pay for advice and sign indemnity forms also.
It is hypocritical for an IFA to advise you, probably advise you against, which protects themselves... yet STILL take 5% of your investment pension for his/her time. That's a terrible start to your retirement fund...day one, 5% down!

Either pay it or don’t, you’re going round in circles here. 

Thanks for your kind help and advice. All the best and a merry Xmas.

gm0

Some advisers perhaps a sub group in more "corporate" setups have met government lifetime liability insurance requirement and have audit trail/compliance obligations from that policy around those for conduct of business and  FCA reporting.  In a typical "corporate" way this "admin" will be audited and policed in some manner based on documentation and required "process".  

A standard practice - for years - not limited to DB transfer - has been to obtain client letters of authority to go and source information from schemes for themselves.   For accuracy and completeness, current data, and - yes - some recourse that the scheme providing it are to some extent liable for what they say at a point in time - all the things they *don't* get from a screen print or set of  random point in time "notes" provided by a client which may be excellent or patchy or out of date or half the story, or edited to suit.

So even if you have the material.  They will want to fetch it themselves and need permission letters from you.  And may insist as part of terms of business.  Because compliance and risk management.

This is a problem to those of us with a less than trusting disposition who prefer not to give authority (to an individual or organisation of advisers - that we just met - to access anything at all outside our purview in our broader financial life.  Until or unless we *actually want* them to action something.

Some advisers do not help themselves by trying to get the more empowering versions of authority - on file for their convenience. This is not a smear. It happened to me.  Apparently the wrong draft was sent when I called them out on it. Deliberate as a convenience and a timesaver vs doing it twice - I can see why they though this was a clever wheeze.  Particularly if most people don't read it properly.

I did get one firm to work off materials provided for a cutdown DC review and potential transfer proposal with a bunch of annual prints and pdfs I supplied - refusing all LOA. But they were not happy about it.  It could just as easily have ended with them declining to proceed i.e. our way or the highway.  The admin people collected a defensible file and then let it go.

Do not be surprised by this behaviour.  Normal.  It is rational for them based on their incentives and range of clients encountered.  But you have to decide to go along with it or not.  And accept the consequences of your choices.

scoobyjones1

xylophone said:

Death Benefit to spouse as 0.00%

I wonder does this mean some form of "death before pension age" lump sum rather than a widow (er) pension?

Of course all will depend on the Rules of the Scheme - not impossible that there were no benefits for dependants or possibly only a pension if there were a widow rather than widower.

If the OP's wife does intend to obtain advice concerning a transfer out, the  PTS will take into account all aspects - he could consider that the lack of spousal benefits would be a factor in favour of a positive recommendation.

If a large component of the pension is pre 88 GMP so that there would be no increase in payment, then he might consider that a factor in favour of a positive recommendation.

Hi xylophone. We received more info today. There is a small Death benefit of £800 but only if she dies before the pension starts. After that it is zero.
Also :

Pre April 1997 Protected Rights Transfer Value £28,047.00

Pre April 1997 Non-Protected Rights Transfer Value £32,500.00

HappyHarry

scoobyjones1 said:

xylophone said:

Death Benefit to spouse as 0.00%

I wonder does this mean some form of "death before pension age" lump sum rather than a widow (er) pension?

Of course all will depend on the Rules of the Scheme - not impossible that there were no benefits for dependants or possibly only a pension if there were a widow rather than widower.

If the OP's wife does intend to obtain advice concerning a transfer out, the  PTS will take into account all aspects - he could consider that the lack of spousal benefits would be a factor in favour of a positive recommendation.

If a large component of the pension is pre 88 GMP so that there would be no increase in payment, then he might consider that a factor in favour of a positive recommendation.

Hi xylophone. We received more info today. There is a small Death benefit of £800 but only if she dies before the pension starts. After that it is zero.
Also :

Pre April 1997 Protected Rights Transfer Value £28,047.00

Pre April 1997 Non-Protected Rights Transfer Value £32,500.00

Protected rights must have a death benefit for the surviving spouse, so what you have said there cannot be correct.

This is why IFAs will want to ask questions directly to the DB administrator - it saves confusion and delays further down the line.

scoobyjones1

HappyHarry said:

scoobyjones1 said:

xylophone said:

Death Benefit to spouse as 0.00%

I wonder does this mean some form of "death before pension age" lump sum rather than a widow (er) pension?

Of course all will depend on the Rules of the Scheme - not impossible that there were no benefits for dependants or possibly only a pension if there were a widow rather than widower.

If the OP's wife does intend to obtain advice concerning a transfer out, the  PTS will take into account all aspects - he could consider that the lack of spousal benefits would be a factor in favour of a positive recommendation.

If a large component of the pension is pre 88 GMP so that there would be no increase in payment, then he might consider that a factor in favour of a positive recommendation.

Hi xylophone. We received more info today. There is a small Death benefit of £800 but only if she dies before the pension starts. After that it is zero.
Also :

Pre April 1997 Protected Rights Transfer Value £28,047.00

Pre April 1997 Non-Protected Rights Transfer Value £32,500.00

Protected rights must have a death benefit for the surviving spouse, so what you have said there cannot be correct.

This is why IFAs will want to ask questions directly to the DB administrator - it saves confusion and delays further down the line.

we have in writing and have confirmed over the phone that there is no death benefit, once the pension starts. The death benefits pre 97 do not apply to her, we are told they would have done had she been married then, or had paid extra contributions at a later date but neither apply.
There would be no issue, other than time, if an IFA wanted to contact the DB scheme admin. 

xylophone

Pre April 1997 Protected Rights Transfer Value £28,047.00

Pre April 1997 Non-Protected Rights Transfer Value £32,500.00

https://techzone.abrdn.com/public/pensions/Tech-guide-contracting-out

https://www.which.co.uk/money/pensions-and-retirement/state-pension/what-was-contracting-out-ascMg4t2I7Hk


This terminology is rather odd for what appears to have been a Defined Benefit Pension Scheme as most such schemes were contracted out and had to provide a Guaranteed Minimum Pension.

Was it a COSR?  Or was it a  Contracted In Scheme of some description?

If not, what was it?

Does your wife's State Pension Forecast show a COPE (page 2)?

xylophone

Protected rights must have a death benefit for the surviving spouse, so what you have said there cannot be correct.

See my post above - the terminology seems odd for a DB pension.

Where "protected rights" are mentioned,  one tends to think this is a reference to "former protected rights" and the abolition of Contracting Out on this basis.

https://www.pensionpartners.co.uk/news/the-abolition-of-protected-rights/

 

The OP's wife was a member of this scheme for a very short period.

Yes I think she joined the scheme in 86 and left, end March, 88. No death benefit. Not good eh?

If this was a standard COSR, one would have expected that she would have accrued a GMP and excess.

I suppose that the  DB scheme might have been contracted in ( we have seen a handful of posts relating to  such schemes) or may have been contracted out on a protected rights basis?

It seems to me that this point does need to be established.

If there is a pre 88 GMP, then it is likely to form a high percentage of the value of the pension, particularly if it has revalued in deferment on a Fixed Rate Basis. This could have an effect on the view taken by the PTS on the suitability of a transfer.

At all events, it seems that the OP might not have as much detailed information as he supposes and there will be no way round the need for the PTS to contact the Administrators of the scheme?

scoobyjones1

xylophone said:

Protected rights must have a death benefit for the surviving spouse, so what you have said there cannot be correct.

See my post above - the terminology seems odd for a DB pension.

Where "protected rights" are mentioned,  one tends to think this is a reference to "former protected rights" and the abolition of Contracting Out on this basis.

https://www.pensionpartners.co.uk/news/the-abolition-of-protected-rights/

 

The OP's wife was a member of this scheme for a very short period.

Yes I think she joined the scheme in 86 and left, end March, 88. No death benefit. Not good eh?

If this was a standard COSR, one would have expected that she would have accrued a GMP and excess.

I suppose that the  DB scheme might have been contracted in ( we have seen a handful of posts relating to  such schemes) or may have been contracted out on a protected rights basis?

It seems to me that this point does need to be established.

If there is a pre 88 GMP, then it is likely to form a high percentage of the value of the pension, particularly if it has revalued in deferment on a Fixed Rate Basis. This could have an effect on the view taken by the PTS on the suitability of a transfer.

At all events, it seems that the OP might not have as much detailed information as he supposes and there will be no way round the need for the PTS to contact the Administrators of the scheme?

The administrators have provided forms, info packs and online links to guidance for IFAs. I would be surprised if there is much else they would need to advise her....unless they want to drag their heels. The pension is not attractive to her for the reasons stated. It's worthless on death and she would need to live 30 years, getting £168 a month at first, to get anywhere near the benefit of £60k in her SIPP now. Seems like BAD advice to recommend staying in this to me....and yes I have heard all about the guarantees etc.

Also we have this info...there is more as well :

Value for Money (VFM) Deferred Pension at Normal Retirement Date

Member’s deferred pension due at Normal Retirement Date
Pre 97 Excess £354.08
Pre 1988 GMP £2,015.52
Post 1988 GMP £0.00
Total Deferred Pension £2,369.60

Adult Survivor’s pension payable from member’s death, values are calculated at statement date
Pre 97 Excess £0.00
Pre 88 GMP £0.00
Post 88 GMP £0.00
Total Survivor’s Pension £0.00

xylophone

Value for Money (VFM) 

Again, seems odd in the context of this DB Scheme!

https://www.thepensionsregulator.gov.uk/en/trustees/governing-the-scheme/value-for-members

https://www.gov.uk/government/consultations/value-for-money-a-framework-on-metrics-standards-and-disclosures/value-for-money-a-framework-on-metrics-standards-and-disclosures

However, that said, this information is important,

Pre 97 Excess £354.08
Pre 1988 GMP £2,015.52

Has the Administrator stated that once in payment, there will be no increase in payment on the pre 88 GMP?

scoobyjones1

Bigger picture though, the replies we have had so far have been shocking, One firm wanted £800 plus Vat just to have an in person meeting to discuss this. Then they could work out a quote!  Another quoted £7500 "as a minimum charge" and another £3500 as well as the first quote of £3000.
It is nuts that these fees vary so much for the same work. Another guy said to "use an online adviser as they are cheaper"...by email! Not sure who he meant exactly...

Anyway...one thing came up though and this may be of help to others. One kind adviser offered the opinion that it might be better to wait. His thinking was that the CETVs have come way down due to interest rates climbing higher, this affects Gilt values and so as and when rates are cut...which could start soon but will probably drag out for 2-3 years, then the CETVs will climb again. 
This is hopeful but it still leaves us with the same headaches later on.

Thoughts on that one...CETVs should rise again?