Why Am I Forced To Use An IFA to Convert My Personal Pension Into A Flexible Drawdown ?

salopman1

I have a personal pension plan that I want to convert into a flexible drawdown. I have tried to do this myself on-line but every provider insists that I do it through an IFA. I am being quoted around £5000 for an IFA to do this for me which is ridiculous given that I know exactly what I'm trying to acheive and need very little in terms of actual advice. Does anyone know a way of circumventing this or at least paying a sensible fee for the relatively small amount of work required?

Dazed_and_C0nfused

salopman1 said:

I have a personal pension plan that I want to convert into a flexible drawdown. I have tried to do this myself on-line but every provider insists that I do it through an IFA. I am being quoted around £5000 for an IFA to do this for me which is ridiculous given that I know exactly what I'm trying to acheive and need very little in terms of actual advice. Does anyone know a way of circumventing this or at least paying a sensible fee for the relatively small amount of work required?

You need to explain why an IFA is deemed necessary.

Does the pension have some protected rights?

Smudgeismydog

You shouldn’t need an IFA to switch DC providers, as @Dazed_and_C0nfused notes, it sounds as if you have some form of guarantee on the pension which is necessitating the advice route.

MeteredOut

salopman1 said:

I have a personal pension plan that I want to convert into a flexible drawdown. I have tried to do this myself on-line but every provider insists that I do it through an IFA. I am being quoted around £5000 for an IFA to do this for me which is ridiculous given that I know exactly what I'm trying to acheive and need very little in terms of actual advice. Does anyone know a way of circumventing this or at least paying a sensible fee for the relatively small amount of work required?

As above, if you're being forced to get advice, its likely that your pension has safeguarded rights  Is that the case? It is written into law that advice must be sought.

We have seen some cases where owners of older style pensions with some companies are told they need to get advice, but that's due to the provider rather than any laws. Have you asked if you can transfer the pension?

Marcon

Protected rights were abolished years ago and are now just ordinary rights. The question is whether your pension has 'safeguarded rights', which are entirely different - some sort of promise such as a guaranteed annuity rate.

QrizB

salopman1 said:

I have a personal pension plan ...

As above, more details please on the exact nature of this "personal pension plan".

When did you open it? What's the current value? Which provider is it with?

salopman1

Thanks for the rapid responses !

I do indeed have a 4% guarantee on my Standard Life Section 226 personal pension which I originally took out in around 1987. I could transfer it to a flexible drawdown with Standard Life themselves but they'll only do it through an IFA. I tried doing it online with the likes of Vanguard and Royal London but they also will only do it through an IFA. Maybe the guarantee is the stumbling box ?

salopman1

A bit more info :

The 4% guarantee is a guaranteed annual growth of the pension pot, not a guaranteed annuity rate.

The policy is a "with profits" policy.

xylophone

See

https://forums.moneysavingexpert.com/discussion/comment/81703410/#Comment_81703410

Your pension does NOT have

some form of guarantee or promise during the accumulation phase about the rate of secure pension income ? 

dunstonh

Why Am I Forced To Use An IFA to Convert My Personal Pension Into A Flexible Drawdown ?

A week doesnt seem to go by without another one of these threads.

 I have tried to do this myself on-line but every provider insists that I do it through an IFA

What reason were you given?
Was it:
a) you have safeguarded benefits?
b) you are approaching providers that only transact via IFAs?

I am being quoted around £5000 for an IFA to do this for me which is ridiculous given that I know exactly what I'm trying to acheive and need very little in terms of actual advice.

£5k seems high which suggests that safeguarded benefits are in play.

Does anyone know a way of circumventing this or at least paying a sensible fee for the relatively small amount of work required?

It would help if you told us why you need an IFA.   
And if it is what many of us here suspect then you have a misconception on the level of work and, more importnatly, the level of risk liability.


I do indeed have a 4% guarantee on my Standard Life Section 226 personal pension which I originally took out in around 1987.Guaranteed growth rates are not a safeguarded benefit and do not need an IFA.     Being a S226 RAC, could it be guranteed annuity rates? (Very common on RACs)


 I tried doing it online with the likes of Vanguard and Royal London but they also will only do it through an IFA. Vanguard's pension is not retailed via IFAs.   Royal London is.

Maybe the guarantee is the stumbling box ?No.

RL and SL don't retail a product offering drawdown direct to consumers.  So, that would explain them.   However, Vanguard's pension is a direct to consumer product.  So, they would take it as long as there are no safeguarded benefits.

Or are you asking for a drawdown method that is not available via many direct to consumer products.  e.g. regular UFPLS.  

nomorekids

Who is it with, we managed with DH by completing the Financial Adviser bit of the form with the lovely lady's details from Pension Wise telephone appointment and that was free