It is about time they changed the law, requiring a FA to deal with transferring away a DB Scheme

greyscot

In certain circumstances, as my own, below, it is about time they changed the law on requiring a FA to transfer out a DB scheme. It is scandalous what a FA will charge, for, basically, what is just a form filling exercise. I am looking to transfer my DB scheme to purchase a Lifetime Annuity. An Annuity with Standard Life, for example, will give me over £3,000 more, annually, than what the current DB scheme is offering. This is due to the DB scheme being for dual life and RPI linked. This combination, significantly, reduces the annual amount you receive, compared to a Lifetime, Single Life, Enhanced Annuity with Value Protection. This is based on Cash Equivalent Transfer value (CETV), I have just received from my DB provider. The benefit for purchasing an Annuity can't be any simpler, as the above demonstrates. I am not about to do anything mad. I am simply changing one pension for another, that very, obviously, will be in my best interests.  By the way, I am an ex Accountant, so don't really need any advice from a FA and I am quite confident in my own sums. If there are any FAs reading this, I am inviting you to justify why you feel you have to charge so much, especially, how many actual hours will be spent on a transfer. In my case, there is no risk. I am giving a specific instruction, so the excuse of requiring a high fee to match the long term risk, does not cut it with me, unfortunately. What's that saying about "having someone over a barrell"!!!

Marcon

greyscot said:

In certain circumstances, as my own, below, it is about time they changed the law on requiring a FA to transfer out a DB scheme. It is scandalous what a FA will charge, for, basically, what is just a form filling exercise. I am looking to transfer my DB scheme to purchase a Lifetime Annuity. An Annuity with Standard Life, for example, will give me over £3,000 more, annually, than what the current DB scheme is offering. This is due to the DB scheme being for dual life and RPI linked. This combination, significantly, reduces the annual amount you receive, compared to a Lifetime, Single Life, Enhanced Annuity with Value Protection. This is based on Cash Equivalent Transfer value (CETV), I have just received from my DB provider. The benefit for purchasing an Annuity can't be any simpler, as the above demonstrates. I am not about to do anything mad. I am simply changing one pension for another, that very, obviously, will be in my best interests.  By the way, I am an ex Accountant, so don't really need any advice from a FA and I am quite confident in my own sums. If there are any FAs reading this, I am inviting you to justify why you feel you have to charge so much, especially, how many actual hours will be spent on a transfer. In my case, there is no risk. I am giving a specific instruction, so the excuse of requiring a high fee to match the long term risk, does not cut it with me, unfortunately. What's that saying about "having someone over a barrell"!!!

You may think you are giving a specific instruction, but you've not understood the situation at all - especially the FCA's stance. 

Look no further than @HappyHarry's post of 13 August 2025: https://forums.moneysavingexpert.com/discussion/6623518/transfer-advice-complaint-do-i-have-a-leg-to-stand-on-here/p1 (and note the 74 likes).

If you read that and follow the links, you'll see why nobody else needs to add anything to this thread to answer your question.

Brie

You have my sympathies and most of my support. 

I have a DC work scheme that has an underlying guarantee and cannot get an IFA of any sort to help me with it as they say it is in fact a DB scheme due to the guarantee and therefore cannot be transferred.  The problem is that the scheme administrators do not have and never had any way to payout as a DB.  So the only options are to transfer it to another DC scheme of some sort or to an annuity.

As someone who actually worked as a few years as an administrator for this same scheme I'm really rather frustrated by it all.  

Pat38493

The regulations mandate the FA/IFA to perform a due diligence process which is a lot of work, so it costs a lot of money.  Further - the insurance for IFA who provides this service is very high.  They are not allowed to just sign it off on the basis of you insisting that you want to go ahead.

For sure there can be some fairly rare edge cases where it's a more clear cut case that it's the right thing to do, but even in the case described above, there could still be some risk because it could take several months to do the transfer and there is no guarantee that annuity rates will not change a lot during that time.

Also - the RPI linking and dual life aspect could be debatable as you might decide in 10 years from now that you wanted them after all.  I suspect a big chunk of the higher quote is due to the lack of RPI linking?

Also your mention of enhanced annuity means you have health conditions that will give a significantly reduced life expectancy?  In that case they might also look at whether buying an annuity is the right thing to do at all, so the IFA could end up saying yes you should cash in the DB pension but you should not buy a lifetime annuity (or not with the full amount but only part of it or suchlike).

HappyHarry

greyscot said:

In certain circumstances, as my own, below, it is about time they changed the law on requiring a FA to transfer out a DB scheme. It is scandalous what a FA will charge, for, basically, what is just a form filling exercise. I am looking to transfer my DB scheme to purchase a Lifetime Annuity. An Annuity with Standard Life, for example, will give me over £3,000 more, annually, than what the current DB scheme is offering. This is due to the DB scheme being for dual life and RPI linked. This combination, significantly, reduces the annual amount you receive, compared to a Lifetime, Single Life, Enhanced Annuity with Value Protection. This is based on Cash Equivalent Transfer value (CETV), I have just received from my DB provider. The benefit for purchasing an Annuity can't be any simpler, as the above demonstrates. I am not about to do anything mad. I am simply changing one pension for another, that very, obviously, will be in my best interests.  By the way, I am an ex Accountant, so don't really need any advice from a FA and I am quite confident in my own sums. If there are any FAs reading this, I am inviting you to justify why you feel you have to charge so much, especially, how many actual hours will be spent on a transfer. In my case, there is no risk. I am giving a specific instruction, so the excuse of requiring a high fee to match the long term risk, does not cut it with me, unfortunately. What's that saying about "having someone over a barrell"!!!

Bluntly, it is hours of work and analysis, it comes with huge risk to the adviser, the FCA and PI insurers have a habit of crawling over any advice with a fine toothcomb and when a complaint arises the FOS often decides the advice was wrong and requires the adviser to "compensate" the client. Very few advisers take on this work nowadays, and those that do tend to be the better, more highly qualified advisers that charge more for their time.

Maybe start by reading the FCA guidelines on what is expected of the adviser in a DB transfer situation, and then, as an exAccountant, you will have a better understanding of what is involved and why the cost is as it is. I imagine in your previous role you would have had to read through similar such guidance, and whilst not easily digested by most, with your background you should be able to grasp the key concepts : FG21/3: Advising on pension transfers

Also worth looking at the thread linked to by @Marcon above, which was another poster who also said they would never consider complaining about any DB transfer advice they received, and then, shortly after the transfer was completed, changed their mind and sought comments from this board about how best to complain.
 

gm0

https://www.bbc.co.uk/news/uk-wales-66982512

This is why we cannot have nice things. Spivs and rogues.

We have these rules for a reason.  A good one.  It inconveniences a few.  It protects other people from being ripped off as already happened before.  Not a theoretical harm.  A lot of financially naive folk were trampled by spivs

So no.  Lifetime insured liability for advice given and a narrow pathway.  Is about right. Just short of banning the practice entirely.

It pads advice costs.  But here we are.

dunstonh

 It is scandalous what a FA will charge, for, basically, what is just a form filling exercise. 
<snip?

 If there are any FAs reading this, I am inviting you to justify why you feel you have to charge so much, especially, how many actual hours will be spent on a transfer.

Seeing as my accountant charges more than my fee cap, perhaps you, as an ex-accountant, can explain how you can justify an accountant's fees for doing what is just a form-filling exercise, as you put it.

xylophone

I have a DC work scheme that has an underlying guarantee and cannot get an IFA of any sort to help me with it as they say it is in fact a DB scheme due to the guarantee and therefore cannot be transferred.  The problem is that the scheme administrators do not have and never had any way to payout as a DB.  So the only options are to transfer it to another DC scheme of some sort or to an annuity.

As someone who actually worked as a few years as an administrator for this same scheme I'm really rather frustrated by it all.  

I am puzzled.

You are in a hybrid scheme?

https://helpfiles.thepensionsregulator.gov.uk/members/hybriddetails

It is treated as DB in terms of safeguarded benefits?

It is valued at over £30,000?

DBs can definitely be transferred out  to DCs (with exception of certain Public Service pensions).

You therefore need advice from a Pension Transfer Specialist to transfer out. 

Are you saying that you can't find one?

Marcon

xylophone said:

I have a DC work scheme that has an underlying guarantee and cannot get an IFA of any sort to help me with it as they say it is in fact a DB scheme due to the guarantee and therefore cannot be transferred.  The problem is that the scheme administrators do not have and never had any way to payout as a DB.  So the only options are to transfer it to another DC scheme of some sort or to an annuity.

As someone who actually worked as a few years as an administrator for this same scheme I'm really rather frustrated by it all.  

I am puzzled.

Me too! 

@Brie - is this actually a hybrid scheme, or is it a cash balance scheme? If the latter, you don't need advice to transfer it. It's very curious that you  '...cannot get an IFA of any sort to help me with it as they say it is in fact a DB scheme due to the guarantee and therefore cannot be transferred'. That suggests more than one adviser has said this, which is clearly nonsense. Exactly what information are you giving them to generate such responses?

greyscot

Marcon said:

greyscot said:

In certain circumstances, as my own, below, it is about time they changed the law on requiring a FA to transfer out a DB scheme. It is scandalous what a FA will charge, for, basically, what is just a form filling exercise. I am looking to transfer my DB scheme to purchase a Lifetime Annuity. An Annuity with Standard Life, for example, will give me over £3,000 more, annually, than what the current DB scheme is offering. This is due to the DB scheme being for dual life and RPI linked. This combination, significantly, reduces the annual amount you receive, compared to a Lifetime, Single Life, Enhanced Annuity with Value Protection. This is based on Cash Equivalent Transfer value (CETV), I have just received from my DB provider. The benefit for purchasing an Annuity can't be any simpler, as the above demonstrates. I am not about to do anything mad. I am simply changing one pension for another, that very, obviously, will be in my best interests.  By the way, I am an ex Accountant, so don't really need any advice from a FA and I am quite confident in my own sums. If there are any FAs reading this, I am inviting you to justify why you feel you have to charge so much, especially, how many actual hours will be spent on a transfer. In my case, there is no risk. I am giving a specific instruction, so the excuse of requiring a high fee to match the long term risk, does not cut it with me, unfortunately. What's that saying about "having someone over a barrell"!!!

You may think you are giving a specific instruction, but you've not understood the situation at all - especially the FCA's stance. 

Look no further than @HappyHarry's post of 13 August 2025: https://forums.moneysavingexpert.com/discussion/6623518/transfer-advice-complaint-do-i-have-a-leg-to-stand-on-here/p1 (and note the 74 likes).

If you read that and follow the links, you'll see why nobody else needs to add anything to this thread to answer your question.

Thanks for your feedback. The link, above, does not really apply to me, since, my DB provider has already given me a Cash Equivalent Transfer Value (CETV) that is good for 3 months. 

greyscot

Pat38493 said:

The regulations mandate the FA/IFA to perform a due diligence process which is a lot of work, so it costs a lot of money.  Further - the insurance for IFA who provides this service is very high.  They are not allowed to just sign it off on the basis of you insisting that you want to go ahead.

For sure there can be some fairly rare edge cases where it's a more clear cut case that it's the right thing to do, but even in the case described above, there could still be some risk because it could take several months to do the transfer and there is no guarantee that annuity rates will not change a lot during that time.

Also - the RPI linking and dual life aspect could be debatable as you might decide in 10 years from now that you wanted them after all.  I suspect a big chunk of the higher quote is due to the lack of RPI linking?

Also your mention of enhanced annuity means you have health conditions that will give a significantly reduced life expectancy?  In that case they might also look at whether buying an annuity is the right thing to do at all, so the IFA could end up saying yes you should cash in the DB pension but you should not buy a lifetime annuity (or not with the full amount but only part of it or suchlike).

I qualify for Enhanced but am not about to kick-the-bucket any time soon. You mention a lot of work! How many hours are you talking about. I now run a small Web Design Agency and charge a fair fee for my work on around 40 hours work for a project. Many of my competitors are charging 4 times as much, since, they have more hungry mouths to feed. So whoever uses them is not paying for any better advice, a better solution or for more time on the project, they are, essentially, paying for the Web Designers overheads. The same applies here. it appears I am paying for the risk factor and high insurance costs and not, neccessarily, the amount of work that is done. If the law can be changed to reduce the risk on FAs for my type of transaction, then that would go quite a way to reducing the costs of the FA. I am a big boy with a modicom of intelligence, so i am well aware of the RPI aspect and having a larger annuity now, is what I prefer.