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Possible Transfer Value and Advice

65 replies 2.8K views
PlanToRetirePlanToRetire
17 posts
Forumite
Good evening, I need some help with a possible Final Salary Pension Scheme Transfer.
I am 54, and my husband has just retired. I have 3 smaller pensions to the value of about £100,000. My main scheme is a Final Salary and I am thinking of taking it at 55. However I will probably still work part time. If I leave the pension where it is, at 55 I can get a lump sum of £67.5k and a pension of 10k per year.
The estimated transfer value is 498k and I am considering transferring to a drawdown arrangement. I work for an Investment Company and they offer Pension help, although it does seem to be more Wealth Management. I had the initial consultation with this Company today. However my issue is that they will make a recommendation re the transfer – but if they recommend not to transfer then I can not go ahead with them. The fee of 1% (£5k) still needs to be paid.
Obviously I will consider carefully the advice given, but if I go through this process and the recommendation is not to transfer then if I do decide to go ahead then I will need to do through the whole process again.
I looked into this 2 years ago with my previous employer and I decided not to proceed after getting the initial Transfer Value (which was 75k lower), but I do remember that if I decided to transfer regardless of the advice the Financial Advisor would proceed on my behalf
So my first question is this:

Is it usual for an Advisor to not assist with a Transfer if they recommend not to transfer?

As I said, I am prepared to pay for advice, however I know that the Advisor will err on the side of caution – which is understandable – but I feel that if I do decide to Transfer I will have to pay the first Advisor and still be in the same position.

Therefore the next question is 1% of the Transfer Value reasonable?

Any help would be most appreciated
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Replies

  • dmelifedmelife
    130 posts
    Forumite
    Yes and yes!
  • dmelifedmelife
    130 posts
    Forumite
    Just get them to agree that they will sign an advice declaration and then find a provider who will except a transfer in without positive advice.
  • sandsysandsy
    1.5K posts
    Forumite
    Tenth Anniversary 1000 Posts
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    Is it usual for an Advisor to not assist with a Transfer if they recommend not to transfer?

    It's very common. Many advisers feel that if they've given you professional advice not to do something, it would be unethical to help you do something that is not in your best interests.

    Would you act against your doctor or solicitor's advice?
    Therefore the next question is 1% of the Transfer Value reasonable?

    1%/£5k is not untypical of the level of advice fees for this type of advice at the moment.
  • sandsy wrote: »
    It's very common. Many advisers feel that if they've given you professional advice not to do something, it would be unethical to help you do something that is not in your best interests.
    Would you act against your doctor or solicitor's advice?
    1%/£5k is not untypical of the level of advice fees for this type of advice at the moment.

    Many thanks both.

    Sandsy – I agree and understand why they would not proceed against recommendations.

    However, my point is that the advice will (understandably) be cautious. What I want to do is listen to their advice, consider it, then decide how to proceed. If the recommendation is not to transfer I will take that on board but may still decide to go out. In which case I would need to find a new Advisor – after paying the first on £5k. I’m not saying that they didn’t earn this money or give good advice, but to keep my options open, aren’t I best finding an advisor who will proceed with my wishes regardless of if its against their recommendation?

    I work in central London, so they are plenty of IFAs in the area. They all offer a free first consultation so i think I will make an appointment. I haven’t dealt with an IFA before, so I need to know what to expect and a rough idea of cost. I should make it clear – I don’t begrudge paying for knowledge and advice, but I don’t want to restrict myself to someone who will not be able to carry out my (possible) wishes in the future.

    To be honest I felt the advisor who I spoke to yesterday was more a Wealth Management specialist, whereas I think I need Pensions Advice – not just one off about the Final Salary Scheme but ongoing for the rest of my life.
  • Dazed_and_confusedDazed_and_confused
    6.5K posts
    Forumite
    Uniform Washer
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    If the recommendation is not to transfer I will take that on board but may still decide to go out. In which case I would need to find a new Advisor – after paying the first on £5k.

    Why do you need to find a new advisor?
  • Why do you need to find a new advisor?

    I thought you had to have an Advisor to proceed with a Pension Transfer? So if my work Advisor does not recommend that I transfer I thought that I had to find someone else to help me with this? Or have I misunderstood?
  • Dazed_and_confusedDazed_and_confused
    6.5K posts
    Forumite
    Uniform Washer
    ✭✭✭✭
    I think you've misunderstood.

    You will be much more limited in your initial choice of providers if you want to proceed against the recommendation but I think some will still accept the transfer. Possibly AJ Bell?

    And once the initial transfer is done you now have a SIPP, not a DB pension so may (not 100% certain) be able to simply move your SIPP to any provider of your choice.
  • Peter314Peter314
    63 posts
    Forumite
    Ninth Anniversary 10 Posts
    You are required to take advice from a pension transfer specialist. Having done so (and got a signature from the advisor to that effect) you can do the rest yourself if you wish.

    Some pension companies will only accept transfers where the advice has been to transfer. Others do not require this. One such is AJ Bell but I'm sure there will be others.
  • jimi_manjimi_man
    280 posts
    Forumite
    Eighth Anniversary
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    From reading other threads on here, it seems that you are required to obtain advice, but not necessarily obliged to take it. So presumably you'd find a company that does transfers with a negative recommendation (I believe there are a few - AJ Bell has been mentioned on other threads) and use them. I guess they only require that you have sought advice, not that you are acting on it.

    Personally I think the system is a bit stupid really. These safeguards were brought in to stop people doing daft things, and yet all people seem to be doing is getting the advice, ignoring it and doing the transfer anyway against the advice. Eventually it will go wrong for someone and there will be a furore, they will claim against all and sundry and the subject will be revisited I suspect. Until then...
  • Dazed_and_confusedDazed_and_confused
    6.5K posts
    Forumite
    Uniform Washer
    ✭✭✭✭
    I suspect all it will take is a significant market crash, nothing out of the ordinary, just similar to those seen in the past and we will move into "PPI" territory.

    At which point people like the op (no offence intended) will start to plead they were misled. Hopefully there will be sufficient audit trail nowadays to show they were going against the professional advice to stay put.
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