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  • FIRST POST
    • ZingPowZing
    • By ZingPowZing 3rd Aug 19, 4:58 PM
    • 145Posts
    • 46Thanks
    ZingPowZing
    Don't use Hargreaves Lansdown
    • #1
    • 3rd Aug 19, 4:58 PM
    Don't use Hargreaves Lansdown 3rd Aug 19 at 4:58 PM
    I want to share my experience so that others make a better choice than I did.

    My case has just run its course with the Financial Ombudsman, and she found in their favour. So I'm liable to pay Hargreaves' industry-leading fees. When I do, the FO will publish their final decision and I'll post a link so that others, especially those looking into transferring a defined benefits pension, avoid Hargreves Lansdown at all costs.

    Anyone thinking of transferring out of a DB pension is obliged to buy financial advice. I chose Hargreaves Lansdown. They advised me to do nothing, I insisted on transferring and that's where it became difficult. Hargreaves Lansdown have a fee structure whereby they collect whether or not they make a positive recommendation. Moreover, an insistent client has to find an alternative provider.

    Which I did, but then Hargreaves Lansdown wouldn't sign the other's application form, effectively thwarting the process until the deadline ran out.

    Long story short, I had to start the process anew. Eventually I gained complete control of my pension and I am very content in this regard for the rest of my days except for Hargreaves Lansdown's part in the process.

    Of course Hargreaves Lansdown are at the conservative end of an industry already paranoid about potential future claims and liabilities. I shouldn't have used them. Hypocritically, they still accept DB transfers at one remove. My heartfelt advice to the layman unlikely to be dying soon but considering a DB pension transfer is:

    Please don't use HARGREAVES LANSDOWN.
Page 1
    • bowlhead99
    • By bowlhead99 3rd Aug 19, 5:54 PM
    • 9,375 Posts
    • 17,038 Thanks
    bowlhead99
    • #2
    • 3rd Aug 19, 5:54 PM
    • #2
    • 3rd Aug 19, 5:54 PM
    Pending the FO decision publication, I suppose what happened is:

    - you wanted to transfer DB pension and needed to buy advice to do so;

    - you bought the advice from HL and the advice was don't do it;

    - as they didn't think you should do it, they wouldn't let you throw away the guaranteed benefits and transfer to them;

    - in order to transfer to someone else, you needed to prove that you had received advice on your transfer;

    Then:

    - HL would not sign off to the third party to say that they had advised you on your transfer, because they believe a transfer to be against your best interest, and completing the third party's documentation would assist you to complete the transfer away from your guaranteed benefits.

    - They did not want you to come back a few years later having lost all your money and unable to support yourself through a long retirement, complaining that they assisted you to transfer away from your guaranteed benefits when it was not a smart thing to do.

    - They fear that in order to extract compensation from them for your own stupidity, you will say you didn't understand how valuable your DB was, and that you were only being insistent out of naivety, and any responsible professional should have stopped you in your tracks, and that you'd though that if they were happy to help you complete the transfer away from the valuable benefits by filling in the receiving scheme's paperwork, it couldn't be that bad really, so it gave you a false sense of security and seemed like tacit approval for your actions.

    - As they do not want to be sued by such a customer (chasing compensation from anybody with deep pockets to bail him out of his own mistake); a person who has already been seen to not act rationally in the face of good advice - they decide not to sign your prospective receiving scheme's paperwork, as they do not want to be seen to assist you make yourself worse off.

    Then:
    - Due to the fact that they believe the service they sold to you was merely, "let me know if I should transfer my DB pension" rather than, "evaluate and recommend for or against a DB transfer and - regardless of outcome - also facilitate the transfer even if recommending against it by completing receiving scheme paperwork to say I've had advice and seem to comprehend it" ; they are not going to sign off the receiving scheme paperwork, because they have not sold you the service of signing off the receiving scheme paperwork.

    - you don't think this is fair because you hadn't thought that they would refuse to complete an acknowledgement that they advised you on your transfer, after they advised you on your transfer. Whereas they think they gave you a recommendation report for your own use without a duty to report to third parties, and they are not interested in helping you transfer out of your DB against your best interests, and it would be 'helping you' to do that if they signed off the third party paperwork.

    So they feel their work is done.

    And the Ombudsman felt they should not be compelled to assist you further, to transfer to a likely 'worse off' position, against their better judgement, so she didn't find in your favour.

    My heartfelt advice to the layman unlikely to be dying soon but considering a DB pension transfer is:

    Please don't use HARGREAVES LANSDOWN.
    If you are unlikely to be dying soon, it removes one sensible reason to transfer, because the defined benefits will go on for a long time, so you are perhaps less likely to get a positive recommendation for the transfer. If you know up front that you're likely to want to transfer with or without a positive recommendation, you should ask the adviser up front whether they will help you with the transfer by telling a receiving scheme that they advised you on it. If they say they would not do that, but you want them to do that, you have the wrong firm.

    Hypocritically, they still accept DB transfers at one remove.
    If some advisor had told you that transferring from a DB scheme to a self-managed scheme was something that the advisor recommended, I expect HL would be happy to accept your money and let you self-manage it with them.
    • lvader
    • By lvader 3rd Aug 19, 5:58 PM
    • 2,105 Posts
    • 1,786 Thanks
    lvader
    • #3
    • 3rd Aug 19, 5:58 PM
    • #3
    • 3rd Aug 19, 5:58 PM
    im surprised they even get involved in DB transfer advise, they are fine for smallish SIPPs. Its the current law that is the problem, DB transfers should work similar to going into drawdown where they point you to where to get advise and point out some of the risks.
    • londoninvestor
    • By londoninvestor 3rd Aug 19, 6:03 PM
    • 1,335 Posts
    • 1,175 Thanks
    londoninvestor
    • #4
    • 3rd Aug 19, 6:03 PM
    • #4
    • 3rd Aug 19, 6:03 PM
    Hargreaves Lansdown have a fee structure whereby they collect whether or not they make a positive recommendation.
    Originally posted by ZingPowZing
    I would argue this is much better than the alternative, which would create a very undesirable conflict of interest where the adviser had a financial gain to be made from advising you one way rather than the other.

    They ought to be neutral and dispassionate in their advice, and the fee structure shouldn't incentivise them not to be.
    • jsinc
    • By jsinc 3rd Aug 19, 6:13 PM
    • 199 Posts
    • 99 Thanks
    jsinc
    • #5
    • 3rd Aug 19, 6:13 PM
    • #5
    • 3rd Aug 19, 6:13 PM
    The only aspect that sounds potentially controversial is:
    "wouldn't sign the other's application form, effectively thwarting the process until the deadline ran out"
    But it's impossible to have an informed view on that without knowing exactly what it means/why, and if that delay cost you money.

    I don't think HL offer independent financial advice anyway, so not sure why you'd choose them.
    • ZingPowZing
    • By ZingPowZing 3rd Aug 19, 7:20 PM
    • 145 Posts
    • 46 Thanks
    ZingPowZing
    • #6
    • 3rd Aug 19, 7:20 PM
    • #6
    • 3rd Aug 19, 7:20 PM
    - They fear that in order to extract compensation from them for your own stupidity, you will say you didn't understand how valuable your DB was, and that you were only being insistent out of naivety, and any responsible professional should have stopped you in your tracks, and that you'd though that if they were happy to help you complete the transfer away from the valuable benefits by filling in the receiving scheme's paperwork, it couldn't be that bad really, so it gave you a false sense of security and seemed like tacit approval for your actions.

    - As they do not want to be sued by such a customer (chasing compensation from anybody with deep pockets to bail him out of his own mistake); a person who has already been seen to not act rationally in the face of good advice - they decide not to sign your prospective receiving scheme's paperwork, as they do not want to be seen to assist you make yourself worse off.

    Thank you for the condescsion bath, bowlhead.
    You are over-reaching yourself.
    I'm new to the forum, so don't know if it a character trait of bowlhead99
    • ZingPowZing
    • By ZingPowZing 3rd Aug 19, 7:26 PM
    • 145 Posts
    • 46 Thanks
    ZingPowZing
    • #7
    • 3rd Aug 19, 7:26 PM
    • #7
    • 3rd Aug 19, 7:26 PM
    Full apology , bowlhead.
    I just read through your blind report.
    Entirely correct..
    • ZingPowZing
    • By ZingPowZing 3rd Aug 19, 7:34 PM
    • 145 Posts
    • 46 Thanks
    ZingPowZing
    • #8
    • 3rd Aug 19, 7:34 PM
    • #8
    • 3rd Aug 19, 7:34 PM
    Chapeau again to bowlhead, Hargreaves Lansdown reacted to my suit exactly the way he said they would.

    It cannot be stressed too highly,

    Don't use Hargreaves Lansdown.
    • DairyQueen
    • By DairyQueen 3rd Aug 19, 7:52 PM
    • 924 Posts
    • 1,694 Thanks
    DairyQueen
    • #9
    • 3rd Aug 19, 7:52 PM
    • #9
    • 3rd Aug 19, 7:52 PM
    I'm new to the forum,
    Originally posted by ZingPowZing
    I'm not.

    so don't know if it a character trait of bowlhead99
    Originally posted by ZingPowZing
    It isn't.

    HL are not IFAs and are not able to offer the regulated advice required for a DB transfer. End of.

    Sounds like you misunderstood the service you were buying.
    • ZingPowZing
    • By ZingPowZing 3rd Aug 19, 8:02 PM
    • 145 Posts
    • 46 Thanks
    ZingPowZing
    HL are not IFAs and are not able to offer the regulated advice required for a DB transfer. End of.

    Wrong, DairyQueen.

    I have the bill to prove it.

    Best leave the discussion to avoid further embarrassment.

    For the best..
    • FinancialCaptain
    • By FinancialCaptain 3rd Aug 19, 8:16 PM
    • 1 Posts
    • 2 Thanks
    FinancialCaptain
    Speaking as someone working on DB Scheme's who is on the end of many a moaning conversation from people who don't understand the process, alongside seeing many dodgy looking transfer-out situations, to me
    it seems HL have done everything correct, and i bet if you ask anything of this ahead of time and read through everything they had you sign, that would back it up, further evidenced by the Ombundsman agreeing with them.

    Also highly agree a fee for either outcome is 100% the best option ,if they were only to be paid if they recommended the transfer that would cause problems. This is also, again, definitely something yuo agreed to when you signed up with them.

    To put as a quick summary, you paid for advice, you received advice. That's really the end of it, it doesn't matter if you liked the advice or not.
    • ZingPowZing
    • By ZingPowZing 3rd Aug 19, 8:37 PM
    • 145 Posts
    • 46 Thanks
    ZingPowZing
    Except I cannot pay for advice.
    That's the Catch22.
    • ZingPowZing
    • By ZingPowZing 3rd Aug 19, 8:43 PM
    • 145 Posts
    • 46 Thanks
    ZingPowZing
    Cannot not pay for advice, I meant to write.

    That alone skews the advice clients pay for:
    • JoeCrystal
    • By JoeCrystal 3rd Aug 19, 9:19 PM
    • 1,881 Posts
    • 1,320 Thanks
    JoeCrystal
    DairyQueen is not wrong on the status of Hargreaves Lansdown. It is clear that they are not independent and can only supply “restricted advice” service. Their terms and conditions are pretty clear on that.

    Interestingly enough, it does have a section on transferring a DB pension which is provided by a Pension Transfer Specialist which I found most surprising! HL is not the first name to come to mind when dealing with advice on transferring DB pension schemes! Here is the information below quoted from Financial Advice: Key facts about our costs and service booklet:

    Transferring a Defined Benefit pension
    Defined Benefit pension transfer advice is complex and recommendations are provided by a Pension Transfer Specialist. Advice on transferring Defined Benefits Schemes is based on a Specialist Transfer Value Analysis, for which a fixed charge is applied per scheme.

    How much does this service cost?
    The Specialist Transfer Value Analysis costs 1,250 plus VAT. If you decide to proceed to a recommendation following the analysis. The following charges will apply and are based on the value of the funds being transferred:
    • 2% of the first 200,000
    • 1% of the balance between 200,000 and 1,000,000
    • 0% of the balance over 1,000,000
    All the above charges are subject to VAT where applicable.

    Anyway, I would not use Hargreaves Lansdown for any financial advice! ZingPowZing, please post the link to the decision eventually; I think it would be an interesting read at least.
    • AnotherJoe
    • By AnotherJoe 3rd Aug 19, 9:34 PM
    • 15,978 Posts
    • 19,184 Thanks
    AnotherJoe
    Cannot not pay for advice, I meant to write.

    That alone skews the advice clients pay for:
    Originally posted by ZingPowZing

    Then use the edit button.


    Back on topic, I see no general reason in your lengthy rant to not use HL apart possibly from giving advice on DB transfers. What about all the rest of their services ? You didn't mention their top 50 49 recommended funds for example



    Anyway, one key bit of knowledge you are probably missing that's of key importance to your post, there have already been decisions by the regulator that merely by providing a report, even if it advises against transferring, the advisor has been guilty of aiding a transfer which was not in the best interest of the client, and the advisor has to pay compo ! Yes, Nanny State gone mad, dont blame them blame the FCA. No doubt HL are working to that basis as they do when they annoyingly ask me 20 questions every year. Its all to cover their a***s and again the NS is to blame.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Kentish Dave
    • By Kentish Dave 3rd Aug 19, 10:30 PM
    • 806 Posts
    • 1,492 Thanks
    Kentish Dave
    If youd appreciate the perspective of a professional, this is like complaining to the GMC that your GP refused to write a letter to the surgeon who youd asked to staple your testicles to the 09:20 departure from Kings cross to York, as he feared that any communication could be seen as tacit acquiescence.
  • jamesd
    Hargreaves Lansdown wouldn't sign the other's application form, effectively thwarting the process until the deadline ran out.
    Originally posted by ZingPowZing
    While my view may change after reading the report:

    1. the law requires proof that advice has been taken
    2. you presumably knew this and regardless of what their advice would be knew that the law would be complied with and you could transfer because you'd taken advice
    3. Hargreaves Lansdown refused to tell the DB provider that you had taken advice
    3b. perhaps as well as not merely signing the form: provider phones them and they say no advice given or don't reply
    4. the DB provider presumably refused to accept a copy of the advice and bill for it as proof of advice. The law doesn't require signing a specific form, merely proving advice.

    So key issues:

    a. did Hargreaves Lansdown clearly and obviously tell you before you engaged them that if their advice was not to transfer they would attempt to prevent the DB scheme from obtaining proof of advice, thereby frustrating a key part of the service you were purchasing?
    b. did the receiving scheme refuse to accept the advice and bill for it as proof of advice or did Hargreaves Lansdown block this somehow?

    Assuming a they were not clear then my initial thought is that Hargreaves Lansdown should be compelled to pay you redress to put you in the position you would have been in if they had confirmed that you'd taken advice, likely consisting of:
    A. the cost of the second advice and
    B. investment gains or losses that were missed because of the delay and
    C. some amount for inconvenience and distress

    In addition:

    D. Parliament was clear that getting advice was desired and the government accepted this feedback and modified the proposed legislation to require the scheme with safeguarded benefits to verify that advice had been provided.
    D1. As a matter of public policy it is harmful for advice providers to try to circumvent the law by refusing to say that advice has been taken and the Ombudsman should refer Hargreaves Lansdown to the FCA so that enforcement action to compel them to say they provided advice can be taken.

    But this is subject to change based on the actual facts and the Ombudsman opinion.

    Put simply, you complied with the law and Parliament's intent and Hargreaves Lansdown appears to have improperly blocked you.
    Last edited by jamesd; 05-08-2019 at 11:05 PM. Reason: in review
  • jamesd
    If you’d appreciate the perspective of a professional, this is like complaining to the GMC that your GP refused to write a letter to the surgeon who you’d asked to staple your testicles to the 09:20 departure from King’s cross to York, as he feared that any communication could be seen as tacit acquiescence.
    Originally posted by Kentish Dave
    Not even remotely close. It's more akin to a doctor with an NHS contract refusing to report a patient having acquired an infection in the practice because doing so might cause them to incur costs.

    You've also clearly demonstrated a lack of professionalism by your choice of analogy. It's entirely possible that Hargreaves Lansdown advised against transferring because it exceeded their own risk tolerance even though the customer would be better off. You and I lack the information needed to have a view on whether this transfer was or wasn't likely to benefit ZingPowZing. Neither of us can have a useful opinion on the quality or merits of the advice because we lack the facts needed to form an opinion.

    But what currently seems clear is that by refusing to say that they had provided advice, Hargreaves Lansdown acted improperly and must be compelled to act properly in the future.

    We also don't know the exact nature of the complaint the Ombudsman ruled on so we don't know what was said about what currently appears to be unambiguously improper conduct. It might not have even reached the actual Ombudsman stage of the FOS process yet.
    • Blackbeard of Perranporth
    • By Blackbeard of Perranporth 4th Aug 19, 4:23 AM
    • 6,329 Posts
    • 36,947 Thanks
    Blackbeard of Perranporth
    We got as far as a DB transfer here, but OP won’t tell us why?

    https://forums.moneysavingexpert.com/showthread.php?p=76104707
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    • bowlhead99
    • By bowlhead99 4th Aug 19, 7:58 AM
    • 9,375 Posts
    • 17,038 Thanks
    bowlhead99
    But this is subject to changed based on the actual facts and the Ombudsman opinion.

    Put simply, you complied with the law and Parliament's intent and Hargreaves Lansdown appears to have improperly blocked you.
    Originally posted by jamesd
    We also don't know the exact nature of the complaint the Ombudsman ruled on so we don't know what was said about what currently appears to be unambiguously improper conduct. It might not have even reached the actual Ombudsman stage of the FOS process yet.
    Originally posted by jamesd
    JoeCrystal highlighted HL's service offering in post #15, which is a two stage process.

    Firstly for 1250+vat (which is a flat fee for any size of pot and a lot lower than what IFAs typically charge for DB pension transfer advice, from anecdotes on this forum) they will conduct a Transfer Value Analysis. This is presumably the report described by FCA in the 2018 COBS update for pension transfers as a "Transfer Value Comparator" - which indicates the value of the benefits that would be given up (what it would cost to replace them).

    Then having created that report (which would be a mandatory precursor to actually giving advice, and which FCA say should form part of the overall advice/recommendation eventually given), if you decide to proceed to a recommendation having seen the analysis, they can go on to sell you proper advice / recommendation and implement it for you. The cost of doing that is on a percentage of assets basis. So a (say) 500k pot would cost 7k for a recommendation having paid the token 1.25k+ VAT for initial value analysis.

    They will need to be paid the 1.25k whether or not the pension transfer appears to be 'good value'.

    It's not clear from the OP whether, after they conducted the flat-fee value analysis (e.g., you have a CETV offer of 500k but it would cost 700k to obtain a comparable level of income from an insurer), what happened next.

    Was he told that they didn't want to sell him a 'recommendation' for 7k on whether to transfer and how to invest the 500k, because their recommendation might be: don't do it at all? So he is out 1.25k and needs to engage a different adviser if he wants to be able to tell a receiving scheme that he's been advised on the transfer: because all he knows so far is a likely real-world cost of replacing the benefits, compared to the CETV offered - and has not actually been formally advised how best to go forward with a transfer?

    Or, perhaps the OP decided that he should proceed to the recommendation stage because he really wanted to do the transfer come what may, and he needed that 'regulated advice / recommendation' to be able to move his money to HL or to anywhere else, so he paid them the 7k for a full recommendation [for a 500k pot, just my example figures], and the recommendation was don't do it.

    If it's the latter case, I can see Jamesd's point that: advice has been received and the receiving scheme should be able to review the reports and the invoice for the advice service and determine for themselves that advice has been received in relation to transferring out of this specific scheme. For their risk management/ internal control procedures, they also have to verify that advice was provided (i.e. there is a risk that OP faked the report to save himself some cash) - in which case they should be able to verify with HL that the advice did take place, otherwise HL are deliberately obstructing the aims of the legislation.

    However, if it's the former case, and advice has not actually been provided because either (a) HL declined to provide the advice / recommendation service after they had already shown through the TVC report that the CETV was worse than the guaranteed benefits ; or (b) the client did not want to "proceed to a recommendation" for 7k knowing it was likely to be negative, instead hoping his initial 1.25k spend was enough to qualify for a transfer with someone else; then HL should not need to tell the receiving scheme that they advised him on the transfer, as all they did was produce a value analysis report.

    I will admit to not having read all the primary legislation on what exactly constitutes the required level of 'advice' for a transfer. Perhaps the published FOS decision will shed more light on the facts, circumstances and reasoning.
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