IFA pushing me in a direction I don't like

Treaclewader

Hi, I have been trying to move my main SIPP from an administrator who I feel has been very poor in the past and expensive in terms of fees to a self-managed ii SIPP.  I have already opened the ii SIPP account moving a second, smaller pension fund I had into it. However, the administrator prevented me moving my main SIPP to ii stating that my financial adviser wasn't approved to give UK advice as they were based in the UAE where I worked for a number of years.  My current SIPP administrator told me I needed to get independent financial advice and a "Suitability Report" recommending the move from a UK-based IFA before I could move my SIPP.  I sought out an IFA and explained I needed a Suitability Report and that I was intent on combining my main pension with the smaller pension into the ii SIPP. I am having to pay 3% of the value of my SIPP for the IFA's advice.

The IFA has just sent me the Suitability Report and instead of writing the report requesting to move my SIPP to ii, they have recommended moving my SIPP to a Parmenion SIPP, which has far higher charges than ii AND requires me to have a financial adviser permanently, costing me an additional 0.85% annually in costs.  Furthermore the recommended SIPP doesn't have very transparent information on the investment structure, and reading reviews, it appears the administration of the SIPP is also not very good.  I feel I am being pushed to use a company (Parmenion) I do not wish to use, and a product (a Discretionary Managed MPS) that puts me right back where I was with high fees and a product that is virtually impossible for me to self-manage in any meaningful way.

Does anyone have any advice about how I can get the IFA to do what I want and make the recommendation I need to my current SIPP provider so I can get the SIPP out of their hands and into ii?

gm0

You may find.  That the adviser has recommended what they regularly do and find "suitable" for FCA needs.  And that they do not - in general - take lifetime liabiity for recommending clients do DIY.  Or particular DIY SIPP platforms.  The fact you now don't want the offered recommended advised product.  Is one thing.  Separate.

So you decline the implementation.  

Your underlying need was that advice be provided.  And evidenced to "old provider" (with the legal restriction on benefits for transfer out).  

Advisers take lifetime liability now for the advice they provide and insure it. (PI insurers). They don't take dictation about the recommendation.  They only recommend what they typically recommend and stay in their insured swimlane.  They did not manage your expectations well on this.  

Same for a FA flogging an inhouse product.  Or an indie flogging the one they typically match at that wealth level etc.   And you like it or you don't accept the recommendation. They do not - "just write what you want".  It's not how it works.  Even if your proposed DIY solution is perfectly fine.  Or wildly reckless in intent.  Don't care.  Not underwriting that.  Trying to force that is quite likely barking up the wrong tree.

The key fact with transfer restrictions is that holistic (fact find based) transfer advice has been taken.  The consumer has had their opportunity to realise the value (or not) of their restricted for transfer benefits. Context their overall financial situation.  That's what old provider is policing - because FCA regulation based on the law.

At that point you need to provide whatever paperwork your old provider needs to see that shows "advice has been taken".   And your handsomely rewarded adviser needs to provide that.   

They are not so much interested in the intended destination or investments matching a recommendation (though there are other FCA risk management rules which can spoil people's day and cause delays c.f "overseas investments" (or perception of same) and various lists of "not risky" vs "assumed risky" destinations so this topic can be fraught once your transaction drops into a perceived as high risk process.

FCA caused this mess.  Creating a new problem while solving an older one.  Naive consumers losing valuable benefits lured in by unscrupulous advice intermediaries into making innappropriate transfers to self serving products and advice platforms.

The key document now is any contract you have signed with this new IFA and what they are committed to deliver.  

They should, without you moving to the unwanted solution, provide what you need for old provider to get through the gate.  Provide evidence of taking advice.  Even if you rejected the proposed solution recommendation.    

It may (or may not) prove to be a struggle to get them to do the right thing and provide it separate from implementation of their preferred and self-serving solution.

So you identify the "form" your existing provider wants to see to expedite the transfer and meet the regulated test.  And you insist that your adviser provides it to you to give to them.  Doing any transfer you want.  

i.e. for you to use for a DIY transfer to your desired destination.  Get them to do it.  Resolve any issues with "wrong form/template" of a bureaucratic nature. Then end the IFA relationship.  

Refuse the implementation that you don't want meanwhile.

If you can back out of this contract. Or have not reached that stage and signed one.  
3% sounds expensive if uncapped. But pot size dependent of course
That ship may have sailed.

A wily adviser may attempt to "Link" the two things in your mind.  The recommendation and the fact advice was taken and paid for.  This is dissembling.    If they take your money and provide the factfind and pension transfer suitable recomendation per FCA deliverables.  They have provided advice.  Just as you cannot in general get the proof of advice document without paying for the service.  

And they have to live with lifetime liability it was documented correctly and "suitable".  (Which is not a very precise target but is what it is).  The decision to accept and implement the advice is yours.

dunstonh

 However, the administrator prevented me moving my main SIPP to ii stating that my financial adviser wasn't approved to give UK advice as they were based in the UAE where I worked for a number of years.

The adviser doesn't matter unless the pension is defined benefit or has safeguarded benefits.    Or the scheme isn't registered in the UK.

 My current SIPP administrator told me I needed to get independent financial advice and a "Suitability Report" recommending the move from a UK-based IFA before I could move my SIPP. 

Who is your current SIPP provider and what reason have they given for this?  

The IFA has just sent me the Suitability Report and instead of writing the report requesting to move my SIPP to ii, they have recommended moving my SIPP to a Parmenion SIPP, which has far higher charges than ii AND requires me to have a financial adviser permanently, costing me an additional 0.85% annually in costs. 

IFAs are not allowed to insist on ongoing servicing.   Parmenion works with FAs and IFAs.   Typically, it's more commonly used by advisers using the wealth management model and not general practitioners.   Parmenoin do not require you have to have a permanent adviser.

Furthermore the recommended SIPP doesn't have very transparent information on the investment structure, and reading reviews, it appears the administration of the SIPP is also not very good. 

It's a whole of market platform.  So, not sure what transparancy you are looking for.   It generally has a good reputation and gets good reviews for a firm that has been around over 30 years (the older the firm the more legacy issues that can exist that can distort reviews.  Plus, it doesnt get people to do reviews at sign up when they are most likely to give perfect scores)

Does anyone have any advice about how I can get the IFA to do what I want and make the recommendation I need to my current SIPP provider so I can get the SIPP out of their hands and into ii?

You tell them.  It is as simple as that.   An IFA must take your preferences into account.   FA's, on the other hand, are restricted on what they can offer. IFAs are not allowed to restrict.  Any hint of a restriction and they cannot refer to themselves as IFAs.

There will be one difficulty, though.   ii is not geared to provide advisers with the regulatory documents.   So, an IFA cannot recommend ii.   

It maybe that a stepping stone is needed.  i.e. get into the mainstream and then you transfer from mainstream (where you are free to move it without restriction to ii.    If a stepping stone is needed, then there are far better options to use.

At this point, I am more interested in why a SIPP provider would insist on an IFA.  SIPPs don't provide guaranteed annuity rates or GMP.  So, it won't be that.   It is possible for protected tax free cash to exist on a SIPP but that is not a safeguarded benefit.    Or perhaps you don't have a SIPP and you are mistakenly referring to it as one.   

Either way, you need to know the reason why an adviser is needed.   

Treaclewader

Thanks @gm0 for your reply which is very interesting.  As I suspected the IFA appears to be pushing me down a track that suits them and their need to protect themselves. It is interesting what you say about me simply needing to demonstrate I have sought and received the advice.

Thanks too to @dunstonh for your comments.  You raise several questions.

Yes, I definitely have a SIPP. It is a Brooklands SIPP which was administered by PSG SIPP Ltd who went to the wall and my SIPP was taken over by Alltrust Services Limited in October 2024.  I have found dealing with Alltrust extremely difficult.  They have never given a specific reason for why the Suitability Report was required, they simply stated in their email to me when I requested a transfer the following:

"In addition to the above, please ensure appropriate advice has been taken and that we are provided with a copy of the signed Suitability Report and that the adviser is properly regulated to provide financial advice. 

The Suitability Report should be prepared by your financial adviser that explicitly addresses the key aspects of this transfer. This report should confirm that transferring your SIPP to the proposed scheme is appropriate and in your best interest, considering factors such as: 

1. Exit fees or penalties: The adviser should detail any exit charges from your current SIPP (if applicable) and confirm you are aware of them. If there are market value adjustments or other costs for leaving your current plan, those should be factored into the advice. 
2. Ongoing costs and charges: The report should compare the fees you will incur in the new scheme (administration fees, investment management fees, any performance fees, etc.) versus your current arrangement. It’s important you understand the cost implications. 
3. Investment strategy and risk: Critically, the adviser must opine on the suitability of the investment portfolio/strategy you intend to pursue in the new scheme. This includes an assessment of the risk level relative to your risk appetite and capacity for loss. If the new scheme involves high-risk or illiquid assets, the adviser should explicitly acknowledge this and confirm why it is or isn’t suitable for you. 
   The Suitability Report should be on the adviser’s letterhead, signed and dated, and addressed either to you or to us (or both). It essentially serves as a second layer of confirmation – from a professional who knows your personal circumstances – that this transfer is advisable. We, as the provider, will review this document to ensure it satisfactorily covers the above points and raises no new concerns."

As you can see they have set out quite detailed instructions for this suitability report. My financial adviser in the UAE provided the report detailing all the information above, but they rejected the report firstly, and incorrectly on the grounds I had been cold-called by the adviser in the UAE, which I had not - I contacted them as I had been working with them for over 10 years. Then they rejected the report on the basis that the adviser was not licensed in the UK and that they had an association with someone who was under investigation in Australia.  Neither of which affected the quality or relevance of the advice given?

I was interested by your comment:
"ii is not geared to provide advisers with the regulatory documents.   So, an IFA cannot recommend ii." I made it clear to the IFA at the outset I wished to move to ii so why wasn't that made clear they cannot recommend it.  What do you mean by "ii is not geared to provide advisers with the regulatory documents"? How can ii function as a SIPP administrator if they are unable to provide regulatory documents? What documents can they not provide?

You also said:
"It maybe that a stepping stone is needed.  i.e. get into the mainstream and then you transfer from mainstream (where you are free to move it without restriction to ii.    If a stepping stone is needed, then there are far better options to use." What do you mean by "get into the mainstream"? What would you consider to be the mainstream? For example I have a Nest stakeholder pension through my current work, would a transfer to there be simpler, i.e. cash in my current SIPP and transfer the cash value to that, then at a later date transfer a portion of my stakeholder pension to ii?

Thanks again for your comments.
 

dunstonh

I would be inclined to raise a complaint with Alltrust.

Legally, there is no requirement for advice unless there are safeguarded benefits.   So, they are placing barriers that are not required legally or from a regulatory point of view.   The marketplace allows for DIY investing and for advised investing.  They are putting you in a position to pay for something that is not needed.

As you can see they have set out quite detailed instructions for this suitability report.

What they describe is effectively a suitability report definition. There is nothing unusual in what they are specifying other than the fact that they are requesting it.

UAE provided the report detailing all the information above, but they rejected the report firstly, and incorrectly on the grounds I had been cold-called by the adviser in the UAE, which I had not - I contacted them as I had been working with them for over 10 years. Then they rejected the report on the basis that the adviser was not licensed in the UK and that they had an association with someone who was under investigation in Australia.  Neither of which affected the quality or relevance of the advice given?

I wonder if the first part is down to to the amber/red warning flags on transfers.    It is a bit of nanny-state protection that is overkill and can lead to obscure or non-mainstream providers imposing onerous requirements.   The reference to cold calling is one of the things that is asked.     Additionally, if your assets are non-mainstream (such as unregulated investments or assets not domiciled in the UK), then that can raise flags too.  Multiple flags raised can lead to more onerous requirements.   

I was interested by your comment:
"ii is not geared to provide advisers with the regulatory documents.   So, an IFA cannot recommend ii." I made it clear to the IFA at the outset I wished to move to ii so why wasn't that made clear they cannot recommend it.  What do you mean by "ii is not geared to provide advisers with the regulatory documents"? How can ii function as a SIPP administrator if they are unable to provide regulatory documents? What documents can they not provide?

ii does not cater for advisers.  It is a non-advised distribution channel.   
That means it cannot provide illustrations or charge disclosures that are compatible with the provision of advice.  Regulatory documents are tailored to the distribution channel.   Advice has different disclosure requirements for non-advice.    For example, the key features illustration and cost and charges disclosures have to include adviser costs.  That includes the reduction in yield due to charges from the provider, investments and the cost of advice. As II does not offer distribution via advisers, its disclosures cannot facilitate those.

The IFA cannot do any transactions with ii, as they don't allow it.   And ii will not pay the adviser fee from the pension.  You would have to pay externally.

ii doesn't appear on the cost and charges comparison software as they don't retail via advisers.  The pension comparison software gives the data that complies with the FCA switching template and the figures that go onto the suitability report.

So, there are a whole bunch of things where an adviser wishing to remain compliant cannot use ii as a recommendation to satisfy the existing scheme requirements.   

An IFA could limit their advice not to include product providers but the investments within it, using a more generic approach.  e.g. "you have chosen ii and taken on responsibility for that, but have asked us to provide advice on the investments".   In that scenario, the IFA would not be involved in the transfer in any way but would be responsible for investment advice.   But that would not satisfy the ceding scheme requirements as they want advice for scheme and investments to be covered in the suitability report.

You also said:
"It maybe that a stepping stone is needed.  i.e. get into the mainstream and then you transfer from mainstream (where you are free to move it without restriction to ii.    If a stepping stone is needed, then there are far better options to use." What do you mean by "get into the mainstream"? What would you consider to be the mainstream? For example I have a Nest stakeholder pension through my current work, would a transfer to there be simpler, i.e. cash in my current SIPP and transfer the cash value to that, then at a later date transfer a portion of my stakeholder pension to ii?

Ironically, Aberdeen (formerly known as Standard Life) would be one example.  Aberdeen operate two platforms for advisers.  Aberdeen are also the owner of II.  That is the reason I mentioned them first.    Aviva, Scottish Widows, Royal London and other major brands.  They are all massive mainstream players who will happily transfer to II without any issues (unless you are using unregulated or non-UK domiciled investments).

Any Stakeholder pension would also work.     Nest do not have a stakeholder pension.  They only offer an auto-enrolment scheme.  They are not great with their admin, and I wouldn't really consider them as a stepping stone, as they can get fussy on transfers out.

So, basically, you either need to nail down why the existing scheme is placing onerous conditions that are not legally required and go through the complaints process if necessary to see if they back down.  Something is causing them to request this.   Obscure unregulated investments maybe?

Or you use a stepping stone via an IFA into a simple mainstream option, and once there, move it again to where you want after that.

Treaclewader

Thanks again @dunstonh that's all very useful information, and yes, you're correct, my Nest pension isn't a stakeholder pension but an auto-enrolment scheme. The irony is the small pension I moved into ii initially was with Royal London - and that was very easy to move. If I'd moved my Brooklands SIPP to Royal London first I might have avoided all the delays and cost.

Alexland

Treaclewader said:

"In addition to the above, please ensure appropriate advice has been taken and that we are provided with a copy of the signed Suitability Report and that the adviser is properly regulated to provide financial advice. 

It's interesting they use the word 'please' and stop short of saying it's mandatory in writing but if it is optional then then in my view that's highly misleading and a potential anti-competitive business practice putting what appears (in the absence of any justification) to be an unnecessary barrier to stop you transferring-out.

You may wish to write to them asking them to reply in writing confirming if this is a mandatory requirement or not - this might give you further evidence for your complaint.

If they have been unable to explain what makes their SIPP so special (safeguarded benefits etc) then I also suggest raising a formal complaint with them and if you are not satisfied with the response looking to progress it to the ombudsman.

https://www.fca.org.uk/consumers/how-complain

You may be able to shortcut this process by explaining to them your intent to raise a complaint and potentially progress it to the ombudsman which may cause your case to get escalated and resolved quicker as if they are engaging in dodgy business practices then they may not want too many people to become aware although that won't help the people who follow you trying to transfer-out hitting the same potentially illegitimate requirement.

Treaclewader

Thanks for your comments @Alexland which again are very useful.  I have spoken to the IFA today and they have clarified a lot of the points made by yourself and others above. As @dunstonh suggested, the IFA is not able to give advice relating to a self-invested personal pension where the plan is not managed. The IFA has provided their recommendation but has told me if I still wish to invest via ii then I should send their Suitability Report to Alltrust stating that I have had advice, but I am choosing to not take that advice and that I wish to continue with the transfer to ii.  On that basis Alltrust will be absolved of any responsibility in respect of the future performance of my ii SIPP, and they have fulfilled their regulatory requirement for me to seek independent financial advice. Hopefully I will get there in the end! Thanks to all who have contributed above.

Alexland

Treaclewader said:

On that basis Alltrust will be absolved of any responsibility in respect of the future performance of my ii SIPP, and they have fulfilled their regulatory requirement for me to seek independent financial advice. 

It's not a normal regulatory requirement for them to ensure you have sought advice unless there are safeguarded benefits. People transfer normal SIPPs between providers all the time without getting advice. What they have mandated (? 'please' - did they ever say was absolutely necessary?) you do might have been completely unnecessary and anti-competitive. I'd still be tempted to raise a formal complaint to see if they can justify why they lead you to believe a report was necessary and if they are unable to justify the requirement take them to the ombudsman seeking compensation of your costs and correction of their business practices. Advice is fine as a suggestion but they seem to have implied or made it mandatory.