Pension Advisor would want £21,000 for a failed transfer

Altior

There's no logic to that though. Are we saying the before Brexit, you could move to New Zealand permanently for example and purchase an UK annuity, but now you can't? 

One thing that stands out from reading this thread is the utter ridiculousness of people being absolved from the outcomes of their own decisions and choices. If a client ignores advice they paid or, if they subsequently try and challenge that, it should not get near any court or arbitration. Pandering to the lowest common denominator ruins it for everyone else. 

michael1234

Altior said:

One thing that stands out from reading this thread is the utter ridiculousness of people being absolved from the outcomes of their own decisions and choices. If a client ignores advice they paid or, if they subsequently try and challenge that, it should not get near any court or arbitration. Pandering to the lowest common denominator ruins it for everyone else. 

Interesting - I think I agree with you. Could you elaborate? 

Altior

michael1234 said:

Altior said:

One thing that stands out from reading this thread is the utter ridiculousness of people being absolved from the outcomes of their own decisions and choices. If a client ignores advice they paid or, if they subsequently try and challenge that, it should not get near any court or arbitration. Pandering to the lowest common denominator ruins it for everyone else. 

Interesting - I think I agree with you. Could you elaborate? 

The IFA's will be better informed than I, but I believe the background to the exorbitant costs of a transfer out of a pension with protected benefits is compensation being awarded to claimants who were insistent clients, and received negative advice, resulting in huge insurance premiums. Not the legwork in producing the advice. 

Perhaps the safety net of IFA advice being mandated is warranted (but not @ £30K in today's money), however the law is that advice is required, not that it needs to be positive. The way it has developed means that it has been made effectively prohibitive to transfer through the back door, as pretty much no IFA wants to touch it, and it's far from guaranteed to find a provider that will accept a transfer if the advice was negative. The advice will nearly always be negative, as it's so much safer (if an individual can even find an IFA willing to take the case on!)

Moonwolf

Altior said:

michael1234 said:

Altior said:

One thing that stands out from reading this thread is the utter ridiculousness of people being absolved from the outcomes of their own decisions and choices. If a client ignores advice they paid or, if they subsequently try and challenge that, it should not get near any court or arbitration. Pandering to the lowest common denominator ruins it for everyone else. 

Interesting - I think I agree with you. Could you elaborate? 

The IFA's will be better informed than I, but I believe the background to the exorbitant costs of a transfer out of a pension with protected benefits is compensation being awarded to claimants who were insistent clients, and received negative advice, resulting in huge insurance premiums. Not the legwork in producing the advice. 

Perhaps the safety net of IFA advice being mandated is warranted (but not @ £30K in today's money), however the law is that advice is required, not that it needs to be positive. The way it has developed means that it has been made effectively prohibitive to transfer through the back door, as pretty much no IFA wants to touch it, and it's far from guaranteed to find a provider that will accept a transfer if the advice was negative. The advice will nearly always be negative, as it's so much safer (if an individual can even find an IFA willing to take the case on!)

Part of the problem is the landscape.  It is pretty obvious that with, for example, British Steel, the pension advisors at Port Talbot seriously mislead their clients and left them much worse off.  The believed the information they were given and trusted the IFAs because they were referred on by friends.  It is very easy to say that these people should have done research and worked it out for themselves but for many people it seems more complex than it really is and accounting for guaranteed inflation proofed future value compared to market growth can be counter-intuitive.

Given that sort of behaviour, I suspect it is very easy for the FCA to look at a situation and assume that no client would have taken such a financially poor decision unless mislead.

However we know from posts on here that lots of people make financially idiotic decisions.  The number of people who think they can create more value from investments on a poor CETV than a DB pension with a spouses element is incredible.  Even when they are told they are wrong by multiple resident experts.

dunstonh

The IFA's will be better informed than I, but I believe the background to the exorbitant costs of a transfer out of a pension with protected benefits is compensation being awarded to claimants who were insistent clients, and received negative advice, resulting in huge insurance premiums. Not the legwork in producing the advice. 

Its a combination of reasons
1) historically only around 1 in 10 advisers had PTS permissions
2) the qualification requirement is higher and higher qualifications means higher fees
3) PI insurance - Typical cost floats around 1.5% to 2.5% of turnover without DB pensions on the books.   With DB pensions, it was going up to 10% to 25% of turnover.    Once a firm has DB transfers on its books, it has that liability for the life of the firm.  It's not just a one-year cost.
4) The FCA treat it as missold unless proven otherwise, and the FCA have a high threshold, and they scrutinise firms that deal in high-risk areas much more than firms that stick to the mainstream.
5) Many advisers don't want to do DB transfers.  It's very time-consuming if done correctly, very high risk and just saps the energy from you and prevents you from doing other things.    So, those that do it but are not really interested in doing it often price as a passive blocker.

michael1234

Update:

Boy, do Standard Life make it difficult to open a Stakeholder. Can only open by phone and as is usual these days they are permanently in a state of "we are currently experiencing high call volumes...". Eventually via some magic I managed to send a PM via my existing SL account and got them to arrange a time to call me 4 days later. Today.

For the first 10 minutes of the call, the advisor was absolutely adamant that I shouldn't open a Stakeholder pension as my existing DC pension with them was much better, including a discount and would also accept transfers in. When pressed further that I had received "informal advice" from an IFA to open one as it would make the transfer easier she said I needed to contact that IFA and get them to do it. I responded that that would cost more money and my understanding is that members of the public ("retail" I think we're called) can open it themselves. So finally she agreed to open and allowed me to pay in £16 for a £20 initial balance.

Phew! Partially filled in application form is apparently in the post for me to send back - just like years ago.

Interesting to know why they don't want to open these accounts but that's not really my issue I guess.

So now I suppose its time to find an IFA. I had one PM but nervous of anyone who doesn't have a presence on this site. That said anyone who has a fair amount of history here especially if you've commented already on this thread and think you can do the necessary for a reasonable rate please do get in touch. On top of that, I plan to contact others via directory links already kindly given out on this thread.

Have I got it right that I just need the formal full advice and it doesn't really make much difference what the advice says as I can transfer anyway. Do I need the IFA providing the advice to take care of the transfer or would I save by doing that myself ? In any case, if the advice was "neigh" then they might not want to do it? Could timescales muck things up if I have to transfer asap after receiving said advice?

Sorry this was long.

Dazed_and_C0nfused

Have you got a current CETV?

No doubt someone else will point out of this is completely wrong but I think they have a limited life span and once expired you need a fresh one to continue with a transfer.

And soke scheme providers might charge for a secord one (in a 12 month period).

HappyHarry

Dazed_and_C0nfused said:

Have you got a current CETV?

No doubt someone else will point out of this is completely wrong but I think they have a limited life span and once expired you need a fresh one to continue with a transfer.

And soke scheme providers might charge for a secord one (in a 12 month period).

Let the IFA apply for the CETV - no point in starting the 3 month clock ticking beforehand. The 3 months goes very quickly with this kind of work. 

xylophone

In any case, if the advice was "neigh" then they might not want to do it? In any case, if the advice was "neigh" then they might not want to do it? 

Whinny won't 'e?

FIREDreamer

xylophone said:

In any case, if the advice was "neigh" then they might not want to do it? In any case, if the advice was "neigh" then they might not want to do it? 

Whinny won't 'e?

Stop horsing around! 😀