DB Transfer - important question to ask your IFA

It isnt just the BS scheme. There are two other factors:

1) Will a SIPP provider accept an "insistant client" DB transfer-in if the IFA says that it is not in the clients interest?

See here for some discussion on the matter. How will the client feel if he has paid for expensive detailed advice which has had the effect of preventing him doing what he wants?

2) How can an IFA state that moving the pension is in the clients best interest if he doesnt know how the money is going to be invested? If it is to be invested sensibly it could well in the clients best interest, if it is not invested sensibly it probably wont be unless there are special situations such as terminal illness.

I find it surprising that any IFA would be prepared to take on any DB transfer business unless there was an unusually compelling case and not surprising at all that they would only do so if they were to manage the funds after the transfer.

Thread got busy this afternoon. Lots to reply to....

But surely in this case nobody is asking the IFA to perform a transaction if he doesn't recommend the transaction.

The adviser is on the hook for allowing the transfer to take place. As mentioned higher up, if the investor blows the money on weird things or just makes a pigs ear of it, then the adviser can carry the liability for allowing them to get into that position.

The FOS has been upholding complaints where the adviser gave no investment advice but facilitated the transfer.

That sounds like a possibility (because once it's in a DC pot rather than the original scheme, it could move to wherever the customer wants it) - but won't the IFA want paying for implementing a transfer? Surely there is more work for you as an IFA to do the transfer to the unwanted fund, rather than simply confirming that you have provided advice to the customer in respect of a transfer out (notwithstanding that advice will not be implemented as you want).

The adviser will want paying for the transfer but the investor knew the costs of that. Effectively the investor is carrying out the transaction on transactional (one off advice) basis. Ongoing is not allowed to be mandatory. What the investor does after that is their choice. So, if they move it again to their own pension scheme, the IFA no longer has the liability as the investor themselves moved it away from what the IFA recommended. It breaks the link.

The adviser should need to do no more than confirm they have given appropriate independent advice, as required by the Pension Schemes Act 2015, and that they have provided advice to [name of member[ and that the advice is specific to a possible transfer from [name of scheme]. They also need to confirm their firm has permission under Part 4A of the Financial Services and Markets Act 2000/any other provision of that Act to carry on the regulated activity in article 53E of the Regulated Activities Order.

It appears they are not being asked to 'transact' any business; just confirm the member has received advice. OP can then do whatever it is they want to do - although if it needs an intermediary such as an IFA, that could be where the difficulty kicks in.

That is too simplisitic. Whilst that is the legal position. There is also the regulatory requirements. Then you have the ombudsman who interprets the regulatory guidelines but throws a good dose of "consumer is stupid and needs looking after" into the mix. Then you have the PI insurers, some of which will not insure the adviser if they give advice on insistent clients. And finally, with larger firms (and many small ones) they themselves do not want to carry the risk.

Consumers have a habit of going rogue when they smell compensation. They will make all sorts of allegations and deny things happened or make stories up about what happened. I suffered a complaint in the past where someone alleged a whole range of things that didn't happen. It was just a bunch of lies. I didn't put in place any product for that person. It didn't actually go to the full advice process. It was just the initial free meeting. They mentioned they were thinking about a career break and I said if they do that they would need to stop their pension contributions. The meeting ended and I never saw them again. Two years later the complaint arrived and they tried to reclaim the tax penalty and the contributions back from me as they didn't stop the pension when they eventually took the career break. Luckily, I documented it, including photocopying the payslip and noted what I said and verifying they were currently eligible for that tax year.

A firm near me told me he suffered a complaint because the investments fell in value. Yet the adviser did not recommend the investments. The person self-selected. He also complained that he had no contact in 5 years. Yet the adviser was able to show over 200 email conversations in that period. The FOS upheld the complaint as they deemed the adviser should have been more forceful in not allowing the investor to make those investments. This is despite multiple letters being issued and evidenced telling the investor he should diversify and reduce his holdings and the investor refusing to do so.

Advisers don't want to be put in this position. However, they have every right to protect their backsides just as any one would if they realised the risks involved.

When speaking to advisors regarding a DB transfer there seemed to be a number of charging models. Some only charged if the advice was positive and the pension was transferred. Some charged ~£1000 for the initial advice - payable even if the advice was negative, then a percentage based fee on transfer. In both cases I was in no doubt that unless I paid the full fee I could not transfer.

I wonder if the OP has mistakenly thought that he can avoid the full fee by transferring independently after only the initial advice. How much as a percentage of the transfer value has been paid to the advisor in this case?

The current situation is a total mine field for the IFA and an obstacle course for the person wanting to transfer.

Surely a clarification of the regulations is called for to allow the original intent of the legislation to be carried out.