Cost to transfer a 260k pension

Cobbler_tone

Marcon said:

Cobbler_tone said:

Silvertabby said:

Cobbler_tone said:

You should be able to source free abridged advice, who may well advise you not to pursue and then it won't cost you anything.

Beware of 'free' advice from someone who would only recommend a transfer into a scheme that they work for....

Abridged advice won’t do that. They’ll either say “you shouldn’t transfer” or more likely “you need full advice”. If anyone then offers full advice for peanuts then run! 

I personally think the whole thing is a scam because if someone is switched on they could do most of it on their own, at least to the point of making an informed decision. The IFA’s have certainly turned it into a big money maker.

You might 'personally think' that, but the reality is something else entirely.

Funny that so many IFAs have quit the transfer market if it's such a wonderful way to make money. Do you have the faintest idea how high risk giving advice on a DB transfer is, and how it impacts on their PI premium  going forward?

No I don't but paying £10k+ for the advice and form filling is clearly covering the 'risk' and PI premium as opposed to time spent. Out of interest what is the risk to them? Are they liable if investments they recommend don't perform, or are you referring to reputational risk? There are still countless places that offer the service.

MallyGirl

The risk is that someone transfers, even against advice, and then blows the lot. They then complain that the advice to not transfer should have been more assertive and the FCA agrees.

Marcon

Cobbler_tone said:

Marcon said:

Cobbler_tone said:

Silvertabby said:

Cobbler_tone said:

You should be able to source free abridged advice, who may well advise you not to pursue and then it won't cost you anything.

Beware of 'free' advice from someone who would only recommend a transfer into a scheme that they work for....

Abridged advice won’t do that. They’ll either say “you shouldn’t transfer” or more likely “you need full advice”. If anyone then offers full advice for peanuts then run! 

I personally think the whole thing is a scam because if someone is switched on they could do most of it on their own, at least to the point of making an informed decision. The IFA’s have certainly turned it into a big money maker.

You might 'personally think' that, but the reality is something else entirely.

Funny that so many IFAs have quit the transfer market if it's such a wonderful way to make money. Do you have the faintest idea how high risk giving advice on a DB transfer is, and how it impacts on their PI premium  going forward?

No I don't but paying £10k+ for the advice and form filling is clearly covering the 'risk' and PI premium as opposed to time spent. Out of interest what is the risk to them? Are they liable if investments they recommend don't perform, or are you referring to reputational risk? There are still countless places that offer the service.

Where's @dunstonh when you need him...

If there are still 'countless places that offer the service' why are so many people - including those posting here - struggling to find anyone to give the advice?

JoeCrystal

MallyGirl said:

The risk is that someone transfers, even against advice, and then blows the lot. They then complain that the advice to not transfer should have been more assertive and the FCA agrees.

Especially since the FCA are particularly pro-customer, as I understand, I vaguely recalled that Barclays, which operates an execution-only share dealing account, only takes orders and executes them without further services such as research, banking, or advice still has to reimburse one of their customers their investment loss as it was decided that it is the bank's fault for allowing the investments to be invested by their customer and the bank did not do enough to warn the customers!

Sarahspangles

Cobbler_tone said:

Silvertabby said:

Cobbler_tone said:

You should be able to source free abridged advice, who may well advise you not to pursue and then it won't cost you anything.

Beware of 'free' advice from someone who would only recommend a transfer into a scheme that they work for....

Abridged advice won’t do that. They’ll either say “you shouldn’t transfer” or more likely “you need full advice”. If anyone then offers full advice for peanuts then run! 

I personally think the whole thing is a scam because if someone is switched on they could do most of it on their own, at least to the point of making an informed decision. The IFA’s have certainly turned it into a big money maker.

Here’s an example of thousands of people being compensated for receiving poor advice to transfer out of their DB scheme. In the first place, the advisor can be pursued to pay the compensation. It’s no wonder their insurance is so expensive. Some advisors have gone out of business, in which case FSCS steps in - which we all pay a bit towards, through a levy on what could otherwise be a bit more interest. Presumably it’s the end of those advisors’ careers too.

Many of the affected future pensioners were fixated on getting their hands on the CETV, through a poor understanding of factors like inflation and risk. They just saw a big number.

https://www.bbc.com/news/uk-wales-60937629

Albermarle

JoeCrystal said:

MallyGirl said:

The risk is that someone transfers, even against advice, and then blows the lot. They then complain that the advice to not transfer should have been more assertive and the FCA agrees.

Especially since the FCA are particularly pro-customer, as I understand, I vaguely recalled that Barclays, which operates an execution-only share dealing account, only takes orders and executes them without further services such as research, banking, or advice still has to reimburse one of their customers their investment loss as it was decided that it is the bank's fault for allowing the investments to be invested by their customer and the bank did not do enough to warn the customers!

Which presumably is a similar reason why no mainstream providers of SIPP's or personal pensions, will accept a DB transfer without a positive recommendation.

Cobbler_tone

Sarahspangles said:

Cobbler_tone said:

Silvertabby said:

Cobbler_tone said:

You should be able to source free abridged advice, who may well advise you not to pursue and then it won't cost you anything.

Beware of 'free' advice from someone who would only recommend a transfer into a scheme that they work for....

Abridged advice won’t do that. They’ll either say “you shouldn’t transfer” or more likely “you need full advice”. If anyone then offers full advice for peanuts then run! 

I personally think the whole thing is a scam because if someone is switched on they could do most of it on their own, at least to the point of making an informed decision. The IFA’s have certainly turned it into a big money maker.

Here’s an example of thousands of people being compensated for receiving poor advice to transfer out of their DB scheme. In the first place, the advisor can be pursued to pay the compensation. It’s no wonder their insurance is so expensive. Some advisors have gone out of business, in which case FSCS steps in - which we all pay a bit towards, through a levy on what could otherwise be a bit more interest. Presumably it’s the end of those advisors’ careers too.

Many of the affected future pensioners were fixated on getting their hands on the CETV, through a poor understanding of factors like inflation and risk. They just saw a big number.

https://www.bbc.com/news/uk-wales-60937629

Those who received 'unsuitable advice'.
It is pretty clear for me. There is literature in every pension comms warning of pension scams. Then I am sure there are some really poor regulated IFA's, the nature of any industry.
I am sure all of the basics should be covered off. 'take it out and once it has gone it's gone', 'most investments can go up and down'. Then I am sure there are scenarios where people categorically should be advised not to transfer but may not be.
Ultimately if you are being charged 5 figures you should have the confidence that you are fully informed and have the appropriate protection if you are genuinely 'stitched up'. 
If it is a case of someone taking their money and spending it on cars, holidays, shopping sprees etc, I doubt if they would have much to complain about if the correct processes are followed.

Sounds as though regulations may need looking at as the idea of allowing flexibility was introduced to enable exactly that. Maybe all DB schemes should be regulated to allow a bridging option, which allows that flexibility in a more structured and protected way using the available fund. Then the ability to transfer could be reviewed.

wjr4

Cobbler_tone said:

Sarahspangles said:

Cobbler_tone said:

Silvertabby said:

Cobbler_tone said:

You should be able to source free abridged advice, who may well advise you not to pursue and then it won't cost you anything.

Beware of 'free' advice from someone who would only recommend a transfer into a scheme that they work for....

Abridged advice won’t do that. They’ll either say “you shouldn’t transfer” or more likely “you need full advice”. If anyone then offers full advice for peanuts then run! 

I personally think the whole thing is a scam because if someone is switched on they could do most of it on their own, at least to the point of making an informed decision. The IFA’s have certainly turned it into a big money maker.

Here’s an example of thousands of people being compensated for receiving poor advice to transfer out of their DB scheme. In the first place, the advisor can be pursued to pay the compensation. It’s no wonder their insurance is so expensive. Some advisors have gone out of business, in which case FSCS steps in - which we all pay a bit towards, through a levy on what could otherwise be a bit more interest. Presumably it’s the end of those advisors’ careers too.

Many of the affected future pensioners were fixated on getting their hands on the CETV, through a poor understanding of factors like inflation and risk. They just saw a big number.

https://www.bbc.com/news/uk-wales-60937629

Those who received 'unsuitable advice'.
It is pretty clear for me. There is literature in every pension comms warning of pension scams. Then I am sure there are some really poor regulated IFA's, the nature of any industry.
I am sure all of the basics should be covered off. 'take it out and once it has gone it's gone', 'most investments can go up and down'. Then I am sure there are scenarios where people categorically should be advised not to transfer but may not be.
Ultimately if you are being charged 5 figures you should have the confidence that you are fully informed and have the appropriate protection if you are genuinely 'stitched up'. 
If it is a case of someone taking their money and spending it on cars, holidays, shopping sprees etc, I doubt if they would have much to complain about if the correct processes are followed.

Sounds as though regulations may need looking at as the idea of allowing flexibility was introduced to enable exactly that. Maybe all DB schemes should be regulated to allow a bridging option, which allows that flexibility in a more structured and protected way using the available fund. Then the ability to transfer could be reviewed.

You sound very similar to another person who hates financial advisers. 

Marcon

wjr4 said:

Cobbler_tone said:

Sarahspangles said:

Cobbler_tone said:

Silvertabby said:

Cobbler_tone said:

You should be able to source free abridged advice, who may well advise you not to pursue and then it won't cost you anything.

Beware of 'free' advice from someone who would only recommend a transfer into a scheme that they work for....

Abridged advice won’t do that. They’ll either say “you shouldn’t transfer” or more likely “you need full advice”. If anyone then offers full advice for peanuts then run! 

I personally think the whole thing is a scam because if someone is switched on they could do most of it on their own, at least to the point of making an informed decision. The IFA’s have certainly turned it into a big money maker.

Here’s an example of thousands of people being compensated for receiving poor advice to transfer out of their DB scheme. In the first place, the advisor can be pursued to pay the compensation. It’s no wonder their insurance is so expensive. Some advisors have gone out of business, in which case FSCS steps in - which we all pay a bit towards, through a levy on what could otherwise be a bit more interest. Presumably it’s the end of those advisors’ careers too.

Many of the affected future pensioners were fixated on getting their hands on the CETV, through a poor understanding of factors like inflation and risk. They just saw a big number.

https://www.bbc.com/news/uk-wales-60937629

Those who received 'unsuitable advice'.
It is pretty clear for me. There is literature in every pension comms warning of pension scams. Then I am sure there are some really poor regulated IFA's, the nature of any industry.
I am sure all of the basics should be covered off. 'take it out and once it has gone it's gone', 'most investments can go up and down'. Then I am sure there are scenarios where people categorically should be advised not to transfer but may not be.
Ultimately if you are being charged 5 figures you should have the confidence that you are fully informed and have the appropriate protection if you are genuinely 'stitched up'. 
If it is a case of someone taking their money and spending it on cars, holidays, shopping sprees etc, I doubt if they would have much to complain about if the correct processes are followed.

Sounds as though regulations may need looking at as the idea of allowing flexibility was introduced to enable exactly that. Maybe all DB schemes should be regulated to allow a bridging option, which allows that flexibility in a more structured and protected way using the available fund. Then the ability to transfer could be reviewed.

You sound very similar to another person who hates financial advisers. 

Funny, that was my thought...but I think it's just a case of being hopelessly under-informed and making the sweeping generalisations someone would make when they've not clocked the ridiculously overblown requirements of the FCA/understood any of the issues regarding PI. Wish I could find the post in which @dunstonh gave an excellent explanation of the consequences of undertaking pension transfer advice business.

Edit - found one of his posts which should help Cobbler to understand why their post might be misguided:

Cobbler_tone

wjr4 said:

Cobbler_tone said:

Sarahspangles said:

Cobbler_tone said:

Silvertabby said:

Cobbler_tone said:

You should be able to source free abridged advice, who may well advise you not to pursue and then it won't cost you anything.

Beware of 'free' advice from someone who would only recommend a transfer into a scheme that they work for....

Abridged advice won’t do that. They’ll either say “you shouldn’t transfer” or more likely “you need full advice”. If anyone then offers full advice for peanuts then run! 

I personally think the whole thing is a scam because if someone is switched on they could do most of it on their own, at least to the point of making an informed decision. The IFA’s have certainly turned it into a big money maker.

Here’s an example of thousands of people being compensated for receiving poor advice to transfer out of their DB scheme. In the first place, the advisor can be pursued to pay the compensation. It’s no wonder their insurance is so expensive. Some advisors have gone out of business, in which case FSCS steps in - which we all pay a bit towards, through a levy on what could otherwise be a bit more interest. Presumably it’s the end of those advisors’ careers too.

Many of the affected future pensioners were fixated on getting their hands on the CETV, through a poor understanding of factors like inflation and risk. They just saw a big number.

https://www.bbc.com/news/uk-wales-60937629

Those who received 'unsuitable advice'.
It is pretty clear for me. There is literature in every pension comms warning of pension scams. Then I am sure there are some really poor regulated IFA's, the nature of any industry.
I am sure all of the basics should be covered off. 'take it out and once it has gone it's gone', 'most investments can go up and down'. Then I am sure there are scenarios where people categorically should be advised not to transfer but may not be.
Ultimately if you are being charged 5 figures you should have the confidence that you are fully informed and have the appropriate protection if you are genuinely 'stitched up'. 
If it is a case of someone taking their money and spending it on cars, holidays, shopping sprees etc, I doubt if they would have much to complain about if the correct processes are followed.

Sounds as though regulations may need looking at as the idea of allowing flexibility was introduced to enable exactly that. Maybe all DB schemes should be regulated to allow a bridging option, which allows that flexibility in a more structured and protected way using the available fund. Then the ability to transfer could be reviewed.

You sound very similar to another person who hates financial advisers. 

Now that is a misguided observation.

I respect anyone in any industry that does a good, honest job....even estate agents, although they are harder to find! What maybe is misguided (or lacking appreciation) is the work and associated cost involved in providing advice in this area.  
I've used the same FA for the past 30 years. He lives in a mansion and drives a fast sports car, got the gift of the gab but I trust him and I certainly trust him not to sell me something I don't need. I have always been shown any commission being earnt and the pros/cons of any products I have used over the years. If I have the confidence to source and do something myself I do so, finding that you need them less as you become more experienced.
e.g. most people can negotiate their own mortgage these days without an advisor if they so wish.
 
If you are suggesting that some IFA's are not 'bad eggs' (or at a minimum give poor advice) then I think that IS misguided! It would be like saying all police officers are law abiding citizens, it's just the nature of any occupational demographic.

As for the point 4) from Dunstonh, if IFA's and firms want to play in this area, you would hope and expect that they have a belt and braces approach. I'd imagine this includes building in protection against everything which constitutes being misold...which would no doubt be a rolling live process. Again, justifying some of the high costs.