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  • FIRST POST
    • LE_CQ2
    • By LE_CQ2 9th Mar 18, 3:43 PM
    • 3Posts
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    LE_CQ2
    DB Transfer - important question to ask your IFA
    • #1
    • 9th Mar 18, 3:43 PM
    DB Transfer - important question to ask your IFA 9th Mar 18 at 3:43 PM
    One of the questions I wished I'd asked when selecting an IFA to help me assess a DB to MP transfer was whether they would give me signed confirmation that they had given me advice, whether I chose to accept it or not.
    My IFA at The Pension Planner, advised me that a transfer out wouldnít cause me any hardship but as I haven't followed their advice about where to transfer my pension to, they won't provide a letter saying I sought advice. This assurance is a regulatory requirement for transfers over £30k and is needed by the transferring out scheme before they will execute the transfer. As the company I'm transferring out of have strict scheme rules which dictate specifically what format the assurance should take, and my IFA wonít provide this, I can't transfer out. I have a report and covering letter from the IFA supporting the transfer, but this isn't enough. I canít believe this can happen and that the only recourse I have is the Ombudsman. However, until I exhaust both companiesí complaints processes (circa 3 months) I canít even approach the ombudsman. By this time the BS Pension will be closed and I will have to start again with a decent IFA but having lost a good chunk of the transfer value as the British Steel Pension plan is transferring to one with lower benefits. I am staggered to find myself in this mess of red tape (British Steel) and obstruction (The Pension Planner).
    Just remember to find out the specifics required by the scheme and check that the IFA will provide the required assurance in whatever format you need.
Page 2
    • Linton
    • By Linton 10th Mar 18, 7:33 AM
    • 9,394 Posts
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    Linton
    I believe the original intent of the law was not to facilitate the transfer of DB pensions. It was purely intended for DC pensions. The fact that it also permitted a mainstream ability to transfer DB pensions only emerged later, which is why the ill thought-through restrictions were brought in.
    • dmelife
    • By dmelife 10th Mar 18, 11:21 AM
    • 38 Posts
    • 49 Thanks
    dmelife
    So OP, you have asked for advice, been provided with said advice and now you are saying to the IFA, I donít want to pay you for your advice or follow it, but will you sign the form so I can do the transfer myself and leave you with liability for life? And you wonder why they arenít keen??!!
    • Tcquins
    • By Tcquins 10th Mar 18, 11:38 AM
    • 54 Posts
    • 32 Thanks
    Tcquins
    So OP, you have asked for advice, been provided with said advice and now you are saying to the IFA, I donít want to pay you for your advice or follow it, but will you sign the form so I can do the transfer myself and leave you with liability for life? And you wonder why they arenít keen??!!
    Originally posted by dmelife
    That is the crux of it. With an investor then self selecting funds it heightens the risk of the plan being used incorrectly- unsustainable rates of withdrawal, far too risky and diversified investment choice. Higher likelihood of it all ending in tears, and a claims management company getting in touch in a few years down the line.
    Many feel it is easier to not face up to their own stupidity, and then pin it on the perceived Ďfacilitatorí.
    • dunstonh
    • By dunstonh 10th Mar 18, 11:55 AM
    • 92,982 Posts
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    dunstonh
    Quite so - but I wonder what the risk is of the Ombudsman deciding that a failure to sign the ceding scheme's paperwork constitutes maladministration, on the grounds that the IFA was simply confirming a fact: the individual has received advice. A sentence involving the words 'rock' and 'hard place' comes to mind...
    Originally posted by Dox
    In this case, no risk at all. The OP is refusing to pay the fee but wants the adviser to sign the forms saying they have received advice. The ombudsman is never going to rule in favour of a consumer trying to potentially defraud the advice company. Effectively, the service ends when the consumer says they are not going to pay.

    Note post #7 by the OP. "Following their advice will cost £4k which I don't want to pay as they haven't given me an investment option I'm happy with."

    The thread has focused more on the content of #1 by the OP. The detail in post #7 changes the position significantly.
    Last edited by dunstonh; 10-03-2018 at 11:58 AM.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • GDB2222
    • By GDB2222 10th Mar 18, 12:28 PM
    • 14,436 Posts
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    GDB2222
    Apart from anything else, the TV Analysis Report shows a critical yield based on a particular scheme that is being transferred to. If that scheme changes, the critical yield will change, and that could influence the advice to transfer or not.
    No reliance should be placed on the above! Absolutely none, do you hear?
    • Brynsam
    • By Brynsam 10th Mar 18, 12:50 PM
    • 1,139 Posts
    • 769 Thanks
    Brynsam
    In this case, no risk at all. The OP is refusing to pay the fee but wants the adviser to sign the forms saying they have received advice. The ombudsman is never going to rule in favour of a consumer trying to potentially defraud the advice company. Effectively, the service ends when the consumer says they are not going to pay.

    Note post #7 by the OP. "Following their advice will cost £4k which I don't want to pay as they haven't given me an investment option I'm happy with."

    The thread has focused more on the content of #1 by the OP. The detail in post #7 changes the position significantly.
    Originally posted by dunstonh
    It does if the £4K relates to the whole service provided, but OP specifically says 'FOLLOWING their advice will cost £4K'. Perhaps they could elaborate on whether this is on top of the advice they have received (and have they paid for it?).
    • dunstonh
    • By dunstonh 10th Mar 18, 1:03 PM
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    dunstonh
    It does if the £4K relates to the whole service provided, but OP specifically says 'FOLLOWING their advice will cost £4K'. Perhaps they could elaborate on whether this is on top of the advice they have received (and have they paid for it?).
    Originally posted by Brynsam
    The advice fee should be the same irrespective of the recommendation. After all, the advice is what is being paid for. Not the product or investments.

    There are some firms that will segment the advice into sections. However, that comes with consequences as it introduces VAT and increases the overall charge. The OP would still be liable for all the costs upto the advice stage if that method was being used.

    I have read the advice fee to be £4000. No mention of VAT or segmenting. So, I took it as an all-in fee. As you say, the OP needs to confirm this because it changes the whole context.
    Last edited by dunstonh; 10-03-2018 at 1:27 PM.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Dox
    • By Dox 10th Mar 18, 1:26 PM
    • 658 Posts
    • 446 Thanks
    Dox
    The advice fee should be the same irrespective of the recommendation. After all, the advice is what is being paid for. Not the product or investments.

    I have read the advice fee to be £4000. No mention of VAT or segmenting. So, I taken it as an all-in fee. As you say, the OP needs to confirm this because it changes the whole context.
    Originally posted by dunstonh
    It does indeed - and I read it that the £4K was on top of the advice fee, given the way the post was worded. Not much point continuing to speculate unless OP comes back and confirms what was actually meant/done.
    • LE_CQ2
    • By LE_CQ2 13th Mar 18, 2:26 PM
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    LE_CQ2
    This is not what I am saying...
    The IFA has given advice but having done my own research into my company's occupational pension scheme, I believe this is a better option. When I questioned the IFA, it was clear to me that he hadn't explored all the options.
    I am not asking him to do anything that would compormise him or his company, I simply need confirmation that I SOUGHT advice. I'm not asking him to say he recommended the route I am taking, in fact I don't even mind if he includes in his letter that he absolutely isn't recommending my chosen option; I simply want a statement saying I consulted. I'm not going behind his back to invest in the same thing he recommended and I'm not trying to fee dodge.


    The purpose of my post was simply to warn others of this pitfall. I'm not sure how helpful it is to this discussion to start making assumptions about my motivations especially as they are ill informed.


    I'm just trying to help others out with something I wished I'd have thought of asking at the outset.
    • dunstonh
    • By dunstonh 13th Mar 18, 3:23 PM
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    dunstonh
    I am not asking him to do anything that would compormise him or his company, I simply need confirmation that I SOUGHT advice.
    You appear to be mistaken on what is required. Its not that you sought advice but abandoned the process after seeking it. You have to pay the adviser to get the advice and the advice process completed. This will result in a written report.

    If you disagree with the advice, then some advisers will refuse to enable you to do the transaction but some will transact. That bit needs verifying at the start. But if you are not paying the IFA to give the advice, then you have not actually sought advice in the eyes of all involved.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • xylophone
    • By xylophone 13th Mar 18, 3:44 PM
    • 25,565 Posts
    • 15,099 Thanks
    xylophone
    The IFA has given advice but having done my own research into my company's occupational pension scheme, I believe this is a better option. When I questioned the IFA, it was clear to me that he hadn't explored all the options.
    https://www.fca.org.uk/news/news-stories/advising-pension-transfers-our-expectations
    • TcpnT
    • By TcpnT 13th Mar 18, 3:53 PM
    • 120 Posts
    • 65 Thanks
    TcpnT
    Apart from anything else, the TV Analysis Report shows a critical yield based on a particular scheme that is being transferred to. If that scheme changes, the critical yield will change, and that could influence the advice to transfer or not.
    Is this statement correct? I thought that a TVAS report determined the future investment yield of the transferred sum necessary to produce a return that could match the benefits offered under the original DB scheme. I can't see why this should be dependent on the details of the scheme being transferred to. Am I missing something here?
    • Malthusian
    • By Malthusian 13th Mar 18, 5:18 PM
    • 4,242 Posts
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    Malthusian
    Is this statement correct? I thought that a TVAS report determined the future investment yield of the transferred sum necessary to produce a return that could match the benefits offered under the original DB scheme. I can't see why this should be dependent on the details of the scheme being transferred to.
    Originally posted by TcpnT
    Because the higher the charges applied by the scheme being transferred to, the higher the critical yield required.
    • sandsy
    • By sandsy 13th Mar 18, 9:41 PM
    • 1,335 Posts
    • 802 Thanks
    sandsy
    The legislation does not require that the advice is followed in order to receive confirmation that advice has been provided.

    Nor is there anything in FCA rules to prevent advisers from charging on a contingent basis (only if the advice is followed).

    So there is nothing to prevent advisers from providing confirmation that advice has been provided if they choose the charge that way.

    Indeed, it could be argued that if advice has been provided and they have not provided confirmation, they are breaking the law.
    • Brynsam
    • By Brynsam 17th Mar 18, 12:31 PM
    • 1,139 Posts
    • 769 Thanks
    Brynsam
    If you've not yet heard it, download today's broadcast of Money Box on Radio 4 (and let me guess - the scheme to which you were recommended to transfer was True Potential Wealth Management...?). Should be able to get your letter confirming you have taken advice without any more fuss!

    Link: https://www.bbc.co.uk/programmes/b09vwzg4 - the relevant item starts 18 minutes in.
    Last edited by Brynsam; 17-03-2018 at 1:37 PM.
    • Brynsam
    • By Brynsam 17th Mar 18, 12:36 PM
    • 1,139 Posts
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    Brynsam
    In this case, no risk at all. The OP is refusing to pay the fee but wants the adviser to sign the forms saying they have received advice. The ombudsman is never going to rule in favour of a consumer trying to potentially defraud the advice company. Effectively, the service ends when the consumer says they are not going to pay.

    Note post #7 by the OP. "Following their advice will cost £4k which I don't want to pay as they haven't given me an investment option I'm happy with."

    The thread has focused more on the content of #1 by the OP. The detail in post #7 changes the position significantly.
    Originally posted by dunstonh
    Listen to what Michelle Cracknell of TPAS had to say on today's edition of Money Box and think again.
    • Linton
    • By Linton 17th Mar 18, 1:00 PM
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    Linton
    Would the OP be able to find a provider willing to accept a DB transfer against IFA advice?
    • Brynsam
    • By Brynsam 17th Mar 18, 1:16 PM
    • 1,139 Posts
    • 769 Thanks
    Brynsam
    Would the OP be able to find a provider willing to accept a DB transfer against IFA advice?
    Originally posted by Linton
    Yes; plenty who will (ditto workplace schemes which are trust-based and still prepared to accept transfers in). In any case, it sounds as if the advice here was actually in favour of a transfer - but the adviser doesn't seem to have considered the option of the workplace scheme, which is an occupational scheme and thus likely to have lower charges (or possibly no charges) than a third-party provider.
    Last edited by Brynsam; 17-03-2018 at 1:26 PM.
    • dunstonh
    • By dunstonh 17th Mar 18, 2:33 PM
    • 92,982 Posts
    • 60,366 Thanks
    dunstonh
    Listen to what Michelle Cracknell of TPAS had to say on today's edition of Money Box and think again.
    Originally posted by Brynsam
    It is not the same scenario. The OP mentions it is an IFA. Not a product provider and sales rep which is the case Moneybox is referring to.

    True Potential has a charge on entering their product. They sell their own product. They are not IFAs. Whereas an IFA has no products to sell. Their advice is what you are buying. The moneybox article makes it clear from 21:40 that the contract she signed only required her to pay if the transfer was done via them into one of their plans.

    A mistake by True Potential and I bet they have reworded that now. If they havent reworded it then maybe people should take advantage of their poor wording. True Potential now have the liability of recommending a pension transfer without receiving any remuneration.

    However, as IFAs don't have their own product, you would likely find this is not an issue. For example, we use a third party company for compliance support and its one of the big two covering IFA firms. We use their recommended template. It clearly words the fee agreement that the client is buying the advice. Nothing is contingent on buying a product.

    So, if a firm is daft enough to set their fee on a contingency basis, then I suppose that makes them fair game.
    Last edited by dunstonh; 17-03-2018 at 2:43 PM.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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