Defined Benefit Pension Transfer / Insistent Client Advice.

Albermarle

Vegasjay said:

@Marcon I hope you are well. Thank you for your message and comments and advice. I totally get it now. Open up a stakeholder pension and then once I’ve done that find a Pension Transfer specialist / IFA for full advice. And once I’ve received this full advice then go back to Aptia to ask them to arrange the transfer to my stakeholder pension. I’ve just been assuming that I could only arrange the transfer If I only received a recommendation to transfer the pension upto now. I’ve read the link and comments again to the link you gave me too. You are right this is a more simpler viable alternative. Thank you for your help. 

Aptia/DB pension providers are very happy to offload their liabilities by people transferring out of DB schemes. So all they need is the piece of paper signed by the IFA that you have had full advice, and it does not matter whether the recommendation to transfer is positive or negative.

The issue is more about finding a home for the transfer, if there is a negative recommendation. Most DC pension providers will not accept a transfer in when the recommendation is negative. This is due to a fear of getting sued by the client if the money runs out quickly, and the client claiming they did not really understand all the implications of transferring. Plus unwanted attention from the FCA asking why they accepted a transfer from an insistent client, as although it is legal it is seemingly frowned upon/seen as poor practice.
Stakeholder DC pensions were set up with a remit that they had to accept transfers in ( not for this reason specifically). Most have closed their books, but as you know two are left.

gm0

1. As long as I get the advice from the pension firm or IFA I don’t need to follow that advice ?.

No.  But you should think very hard about why the advice is not to do it.

Does the advice have to be full advice ?.

Yes.  Preliminary advice is not enough.   Confirmation advice has been received (even if negative) will be needed,

I’ve received forms from Aptia and there is a form on there which the pension firm / IFA have to fill in that I’ve received the advice and I have to submit that. Does the advice have to be positive in that they recommend a transfer or can I still insist or request Aptia to do the transfer if they say it’s not in my best interests ?.

I would suggest you make provider destination refusal the problem of the adviser - if they are still helping you with a recommended destination after a "not suitable" recommendation and confirmation of advice received.  Each adviser will have its one approach to this and many will provide those two items and drop you like the lifetime risk missselling hot potato you have become.

I saw your comment about the section 48 certificate so I’m presuming this is what the pension firm / IFA will give me when they give the advice to give to Aptia ?.

Probably - not sure on the titling of this form

2. Thank you for the advice on Stakeholder pensions too. I had a look into this and I can see that Aviva and Standard Life offer this pension.   Do you have any others you can recommend or know of ?. So the idea would be to transfer my DB pension into this and then use this to draw out of or take lump sums as when I need or take the whole lump sum ?.

Very few stakeholders left.  But it doesn't have to stay there.  Transfer to stakeholder - DB-DC.  Transfer again from stakeholder to any DIY or advised DC pension provider.  You are not limited to the feature set of stakeholders which as older products may not give you all the pension freedom options that you could enjoy elsewhere.  Once in a DC stakeholder - transfer on somewhere else should not be anything like as problematic.

Am I right that I can open up one of these with £16 /20 and then just put in whatever I can whenever I want ?.

Not entirely correct.  Opening new pensions is indeed trivial.  The amount you can contribute is constrained.  Annual allowance is driven by pensionable earnings from employment.  And Once another pension is touched - MPAA (The DC annual allowance also applies.  A lot of this is to prevent gaming via pension recycling. Take income out of A.  Add it to B - get tax relief. The rules are designed to inhibit this unsurprisingly. 

But someone without earnings such as a child can still contribute 2880 per year (which gets relief added to 3600.  For many the limitations on annual allowance are not a big consideration.

Vegasjay

Albermarle - I hope you are well. Thank you for your advice and comments. After all the comments and suggestions I’ve got a much better picture of what to do. I need to get the full advice from a qualified pension transfer specialist and once they have signed the form then I need to find a pension that will accept the transfer. I’ve been looking into Aviva and  Standard Life. I’m also looking for a good qualified pension transfer specialist in the London area. If there are any suggestions for a specialist that will be much appreciated. Thank you very much for your help. 

Vegasjay

gm0. I hope you are well. Thank you for your advice and comments. I have thought hard and long about the abridged advice from Pension Works which stated I should maintain my pension but I just feel with my situation as it is I don’t have a choice plus I’ve exhausted all other options and avenues. I’m awaiting to hear back from Pension Works whether they will take into consideration my reasons. And now I’ve after read all the suggestions and comments on here I’ve started looking into opening up a stakeholder pension and finding a qualified pension transfer specialist to provide full advice incase it’s a negative response from Pension Works. Any suggestions/ recommendations for a pension transfer specialist in the London area will be appreciated. 

1. Noted what you have said about getting the advisor to help me find a destination for my DB pension. 

2. And good idea as you say to transfer out of the stakeholder pension into a DC pension provider to give me better options. 

3. Thank you for comments about the cost of opening a stakeholder pension and how much I can put in whenever I want. I’ve noted this too. 

Thank you for your help. 

Marcon

Vegasjay said:

@gm0. I hope you are well. Thank you for your advice and comments. I have thought hard and long about the abridged advice from Pension Works which stated I should maintain my pension but I just feel with my situation as it is I don’t have a choice plus I’ve exhausted all other options and avenues. I’m awaiting to hear back from Pension Works whether they will take into consideration my reasons. And now I’ve after read all the suggestions and comments on here I’ve started looking into opening up a stakeholder pension and finding a qualified pension transfer specialist to provide full advice incase it’s a negative response from Pension Works. Any suggestions/ recommendations for a pension transfer specialist in the London area will be appreciated. 

1. Noted what you have said about getting the advisor to help me find a destination for my DB pension. 

2. And good idea as you say to transfer out of the stakeholder pension into a DC pension provider to give me better options. 

3. Thank you for comments about the cost of opening a stakeholder pension and how much I can put in whenever I want. I’ve noted this too. 

Thank you for your help. 

Whoa! I appreciate this must all seem horribly complicated, especially with people posting various things which might appear to contradict each other, but you need to pause and take stock.

• Forget it. No adviser is going to recommend a transfer based on what you've said in your opening post (they are hamstrung by FCA requirements), or recommend a scheme to accept your DB transfer. You can avoid the costs and complexities of being an insistent client if you arrange your own transfer to a stakeholder pension. 
• You won't get 'better options' if all you want is a straightforward product with drawdown options, which seems to be the case. Aviva's current stakeholder certainly offers all the pension freedom options you need/are likely to find elsewhere. I think @gm0 is remembering stakeholders from the days when they were first introduced as really basic bread and butter pensions, specifically designed to be low cost and bought/sold without the need for financial advice. Pension 'freedoms' didn't even exist back then, but the more modern stakeholder contracts have moved with the times and now cater for those. You won't get the same range of investment choices, but do you really need thousands of funds to pick from? Stakeholders also mean you can make very modest contributions (£20 gross, so you pay £16 and the provider tops up at basic rate tax). Other personal pensions have much higher levels of minimum contribution.

Your opening post said you had already obtained abridged advice and your adviser would charge £2,995 for full advice. Why do you think you need to go to another adviser, assuming you can even find one willing to do the work? If you do, several things are likely to happen:

1. you'll be charged far more (anything you've already paid for abridged advice will be 'lost') - £2,995 is in any case well below the usual going rate; and
2. you'll have to start again from the beginning, which will almost certainly mean a new CETV because the old one will have expired by the time the new adviser has been put in a place. Your scheme is not obliged to give you more than one CETV in any 12 month period, and if they do, you could be asked to pay for the second CETV (£500-£600 is not uncommon), which could be higher or lower than your current CETV.

Vegasjay

Marcon. I hope you are well. Thanks very much for your message and your advice. So Basically:

1. Stick with Pension Works. Get the full advice at £2995.00. You are right with all the other research I’ve done this is the lowest cost I’ve been given for full advice. I’ve been waiting for them to come back so do I just approach them and tell them I want the full advice and my plan is to open and transfer into Aviva ?. 
2. Once I’ve obtained the full advice go back to Aptia to say I’ve received the full advice and get Pension Works to fill in the form that Aptia require to state I’ve received the full advice. 

3. Open the stakeholder pension with Aviva and then transfer the pension across. I rechecked tonight and there are certain forms that I need to fill in about the receiving pension and that Aviva will need to fill in. Just to double check that Aviva can’t refuse the transfer ?. 
4. My current CETV runs out on 10/5/25 and I’ve just checked the Aptia terms and they will charge me for another CETV in a 12 month period. 

Thank you very much for your help. It is complicated especially when you have no knowledge of pensions, procedure and the options available to you so it’s been really helpful getting all the advice. I would never have thought about or known about stakeholder pensions and doing the transfer myself. Also the fact that I can do the transfer even If the advice given was to maintain in its existing form as a defined benefit. 

Marcon

Vegasjay said:

@Marcon. I hope you are well. Thanks very much for your message and your advice. So Basically:

1. Stick with Pension Works. Get the full advice at £2995.00. You are right with all the other research I’ve done this is the lowest cost I’ve been given for full advice. I’ve been waiting for them to come back so do I just approach them and tell them I want the full advice and my plan is to open and transfer into Aviva ?. 
2. Once I’ve obtained the full advice go back to Aptia to say I’ve received the full advice and get Pension Works to fill in the form that Aptia require to state I’ve received the full advice. 

3. Open the stakeholder pension with Aviva and then transfer the pension across. I rechecked tonight and there are certain forms that I need to fill in about the receiving pension and that Aviva will need to fill in. Just to double check that Aviva can’t refuse the transfer ?. 
4. My current CETV runs out on 10/5/25 and I’ve just checked the Aptia terms and they will charge me for another CETV in a 12 month period. 

Thank you very much for your help. It is complicated especially when you have no knowledge of pensions, procedure and the options available to you so it’s been really helpful getting all the advice. I would never have thought about or known about stakeholder pensions and doing the transfer myself. Also the fact that I can do the transfer even If the advice given was to maintain in its existing form as a defined benefit. 

1. Advisers cannot be seen to 'facilitate' a transfer against their own advice (leaving aside insistent clients...), so telling them what you are going to do regardless might mean they will decline to give full advice, so just ask for full advice.
3. Get your stakeholder opened (a provider could refuse to accept you as a customer - unlikely but why take the risk?) now - for £16 surely it's worth doing? I can't speak for the possibility that a stakeholder provider might change their view on whether they have to accept all transfers, albeit that's my understanding of current legislation, so double check direct with them. If you get an 'ooh no' ask to speak to someone more senior.

Vegasjay

Marcon. I hope you are well. Thanks for the advice and comments and for coming back so quickly. Ok understood I’ll just ask for full advice and that’s it and not tell that I’m going to transfer into a stakeholder pension. That’s good you told me that as I was going to tell them that. I’ve researched both the Aviva and the Standard Life stakeholder pensions and looked at the all the terms and conditions too. I’ve got to call them to get the application forms so I’ll double check on them having to accept my defined benefit pension. On all their terms and conditions they mention that I do need to be sure about the transfer and what I’ll be losing and to get advice where possible. I’ll double check the legislation too and If they are being hesitant l’ll ask to speak to someone more senior. Thank you very much for your help. 

Vegasjay

@Marcon. I hope you are well. Just to let you know that unfortunately Pension Works came back and said that they will not give me the full advice as not in my interests : 

“ Unfortunately, we are not comfortable as a business to move forward to the Full Advice stage. The final recommendation would likely be to retain the scheme and we probably wouldn't allow an insistent client transfer either. Therefore, it is not in your interests to commit to the full advice fee which would be payable regardless of the outcome “.

I’m now looking for other IFAs or Defined benefit specialist companies who might be able to help so If you have any suggestions or recommendations then please let me know. I don’t know whether to go back to Pension Works and ask If they can give me full advice as that’s what I’d like even though they are advising against it. 

I also spoke to Standard Life and they have told me that their stakeholder pension does not allow drawdown. They also said that they would only accept a transfer through the IFA or company and that I won’t be able to do it. I tried Aviva too but was on the phone nearly 40 minutes to talk to someone so couldn’t wait any longer so I’ll try again tomorrow. 

Thank you for your help. 

Marcon

No point going back to Pension Works. They have behaved entirely correctly and professionally by declining to act further, given that their abridged advice confirmed it was not in your interests to transfer. 

Aviva's stakeholder 'Offers access to flexi-access drawdown and other pension freedoms': https://connect.avivab2b.co.uk/adviser/retirement/individual-pensions/stakeholder-pension/

In terms of accepting transfers, see page 4: https://static.aviva.io/content/dam/document-library/adviser/pensions/sp01040c.pdf