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  • FIRST POST
    • ZingPowZing
    • By ZingPowZing 3rd Aug 19, 4:58 PM
    • 120Posts
    • 36Thanks
    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 2
    • GDB2222
    • By GDB2222 4th Aug 19, 8:20 AM
    • 15,624 Posts
    • 83,102 Thanks
    GDB2222
    If the OP paid for a full advice service, I think it's inherent that that requires confirmation to the DB scheme.
    No reliance should be placed on the above! Absolutely none, do you hear?
    • AnotherJoe
    • By AnotherJoe 4th Aug 19, 9:15 AM
    • 15,957 Posts
    • 19,169 Thanks
    AnotherJoe
    If the OP paid for a full advice service, I think it's inherent that that requires confirmation to the DB scheme.
    Originally posted by GDB2222
    If he did. There are two different services (as in post 14) and it's not clear which one OP paid for. Most likely, since the ombudsman found in favour of HL it was the cheaper value comparison, which is not (AIUI) advice.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • DairyQueen
    • By DairyQueen 4th Aug 19, 9:28 AM
    • 923 Posts
    • 1,690 Thanks
    DairyQueen
    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.
    Originally posted by bowlhead99
    The FCA published a consultation paper in March 2018. It covers various outsourcing arrangements that advisors may operate with other firms. It includes functions/boundaries/liabilities between triage/valuation services and pension transfer specialists.

    This was followed, in October 2018, by revised rules and guidance.

    As I understand the HL model, they do not provide an in-house pension transfer specialist service. However, they do offer triage/valuation services.

    I also look forward to reading the ombudsman's decision in this case. HL has been extremely wary of direct involvement (i.e. anything that smacks of 'liability') in the DB transfer market since 2016. I believe they have refused to accept such transfers, even with a positive recommendation, since then. I would be gobsmacked if they have taken personal responsibility for providing full DB transfer advice, rather than the triage/valuation service which you describe.

    OP doesn't provide sufficient info on the service they contracted from HL and/or A N Other company. Perhaps s/he would care to do so?
    • Albermarle
    • By Albermarle 4th Aug 19, 9:50 AM
    • 1,564 Posts
    • 997 Thanks
    Albermarle
    I checked another SIPP providers ( Fidelity) to see what they offer. It seems that as part of their paid for advice service they can offer advice on defined benefit transfers although it is not 100% clear ( cost is 3500 + VAT ) Presume they have ben watching this case carefully !
    Although they also make it clear that they can only offer a Fidelity drawdown product and that they will generally not accept DB transfers with a negative recommendation.
    • ZingPowZing
    • By ZingPowZing 4th Aug 19, 10:34 AM
    • 120 Posts
    • 36 Thanks
    ZingPowZing
    Good morning,

    Thank you for all the responses.

    There was a time when HL were not accepting DB pensions directly but now they do, potentially.

    Terms were understood . I asked Hargreaves Lansdown for their recommendation, in full knowledge that I was to be liable for their fee.
    Why? The inducement offered at the outset is that the adviser will likely provide a clear indication of the suitability of a transfer before the client commits to a recommendation. At that point, between the analysis and the report, if the adviser states that the client's case is "in the balance", and the client commits to buying that report, then the client is trapped. The adviser will simply gather information sufficient to justify a negative recommendation. Not that the process will be described in such terms while the client is deciding whether to go forward: finding another provider for an insistent client will seem like the simplest step in the world.

    Their small print states that HL will not "facilitate" a transfer for an insistent client. In practical terms that means, if you do find an alternative SIPP provider, Hargreaves Lansdown won't liaise with him. I did have both on call at one point, and the HL adviser would not speak with the other.
    As a way out of the impasse, I offered to sign a waiver, indemnifying Hargreaves Lansdown from any future liability.

    Anyway, the deadline passed and I had to start again. The long view is that I am very content to have transferred my pension, I just wish I had gone about it in a different way and hope I can deter others from following my route.
    • ZingPowZing
    • By ZingPowZing 4th Aug 19, 10:43 AM
    • 120 Posts
    • 36 Thanks
    ZingPowZing
    The adviser I used is a Hargreaves Lansdown pension transfer specialist.
    • ZingPowZing
    • By ZingPowZing 4th Aug 19, 11:02 AM
    • 120 Posts
    • 36 Thanks
    ZingPowZing
    "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."

    Correct, although, as a layman I was open to persuasion on the merits of the transfer. If the report had convinced me, I should have been happy to pay for a negative recommendation.
    • DairyQueen
    • By DairyQueen 4th Aug 19, 11:07 AM
    • 923 Posts
    • 1,690 Thanks
    DairyQueen
    The adviser I used is a Hargreaves Lansdown pension transfer specialist.
    Originally posted by ZingPowZing
    Do you mean:
    a) the PTS was employed by HL?
    or
    b) the PTS was an IFA who contracted to undertake PTS work on behalf of HL?
    • ZingPowZing
    • By ZingPowZing 4th Aug 19, 12:05 PM
    • 120 Posts
    • 36 Thanks
    ZingPowZing
    a) the PTS was employed by HL
    • xylophone
    • By xylophone 4th Aug 19, 12:46 PM
    • 31,367 Posts
    • 19,448 Thanks
    xylophone
    https://adviser.royallondon.com/technical-central/pensions/transfers/safeguarded-benefits/


    What form does the confirmation of receipt of financial advice take?

    The individual must confirm to the scheme administrator they have received financial advice before the transaction can proceed. This confirmation must be provided within 3 months of the individual receiving the safeguarded benefit value from the scheme administrator.

    The confirmation must take the form of a written statement from the adviser confirming all of the following:

    They have provided financial advice to the individual on the proposed transaction.
    They have the appropriate permissions to carry out the transaction.
    The adviser's FCA registration number to carry out the transaction.
    The individual's name and the name of the scheme in which they have the safeguarded benefits.
    The adviser does not necessarily have to agree with the proposed transaction to provide this confirmation. They are simply confirming that they have provided advice on the proposed transaction to the individual.
    • TBC15
    • By TBC15 4th Aug 19, 5:12 PM
    • 829 Posts
    • 495 Thanks
    TBC15
    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.
    Originally posted by Kentish Dave
    If your GP gives this advice Id defiantly report him to GMC departure times Mon-Sat 09:06 or 09:30 Sun 09:22
    • xylophone
    • By xylophone 4th Aug 19, 5:18 PM
    • 31,367 Posts
    • 19,448 Thanks
    xylophone
    Id defiantly report him
    A challenging response.
    • TBC15
    • By TBC15 4th Aug 19, 6:28 PM
    • 829 Posts
    • 495 Thanks
    TBC15
    A challenging response.
    Originally posted by xylophone
    Anyone know the opening hours for Specsavers on a Monday
    Last edited by TBC15; 04-08-2019 at 6:29 PM. Reason: More finger trouble
    • Blackbeard of Perranporth
    • By Blackbeard of Perranporth 5th Aug 19, 11:26 AM
    • 6,327 Posts
    • 36,931 Thanks
    Blackbeard of Perranporth
    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.
    Originally posted by ZingPowZing
    Any news on OPs findings today? Has he paid up?


    As OP seems to drop hints and points from his first thread to here. Can I just say that anyone with a degree in common sense does not transfer a DB pension unless they are greedy, in need of money or other. No Financial adviser I know, and the last one I spoke to in setting up my SIPP, would advise on transferring a DB scheme. In fact, they wont even take you money in telling you the answer is no.


    But in this instance, OP decided and has said on his other thread, he knows better?
    Ok, short story: you have to buy financial advice if you're looking into transferring a DB pension. I hired a Hargreaves Lansdown adviser. They recommended I do nothing, I insisted on transferring (so, just about the opposite from the assumption someone made above). I have absolute control of that SIPP now and I am very content but, for an insistent client, Hargreaves Lansdown is absolutely the worst choice. That's the warning I want widely seen. I shall put it on the pensions forum when the FO publish the case.

    Kind regards.
    ZingPowZing
    Originally posted by ZingPowZing

    So why did OP decide to take on HL over a trivial matter if, as OP has said, they are content with the performance of their SIPP?


    Or is OP upset that he had to pay for advice, even though OP knew better?


    I rather gather that in this case, OP wants redress for the fees that he had to pay, and obviously the ombudsmen found in favour of HL and consequently OP is going to have to stump up some cash?
    Last edited by Blackbeard of Perranporth; 05-08-2019 at 11:31 AM.
    Cardiac Arrest - Electrical - Patient unconscious! Heart Attack - Plumbing - Patient conscious!
    Defibrillators Cannot Cure a Heart Attack!
    • MEM62
    • By MEM62 5th Aug 19, 3:35 PM
    • 2,898 Posts
    • 2,573 Thanks
    MEM62
    As a way out of the impasse, I offered to sign a waiver, indemnifying Hargreaves Lansdown from any future liability.
    Originally posted by ZingPowZing
    You would be unable to do that. Any such indemnity would carry no weight with the regulator.
    Last edited by MEM62; 05-08-2019 at 3:38 PM.
    • Malthusian
    • By Malthusian 5th Aug 19, 3:51 PM
    • 6,758 Posts
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    Malthusian
    HL are not IFAs and are not able to offer the regulated advice required for a DB transfer. End of.
    Originally posted by DairyQueen
    Not correct. The advice must be independent of the ceding scheme. As long as it is independent of the scheme it doesn't have to be an IFA, it can be a restricted adviser.

    To put it another way: advice from Hargreaves Lansdown (if they have pension transfer permissions and qualifications) is fine unless you are transferring out of an HL defined benefit scheme (if there is such a thing). If your employer is trying to get people out of the DB scheme and pays an Independent Financial Adviser on its employees' behalf to advise them, that IFA can't sign off the advice.

    If the OP says that HL have pension transfer specialists and he consulted one, there's no reason not to believe him.

    If the OP had paid for a full transfer recommendation then HL should have provided one, and confirmation that they had done so along with it. Providing a full recommendation, charging them for it and then refusing to sign the form is not on.

    However it sounds from his posts that he didn't. He paid for triage, or a Transfer Value Analysis, or something that fell short of a full recommendation. A Transfer Value Analysis is only the first stage in a DB transfer recommendation. If he didn't proceed to receiving a full recommendation then there was no way HL was ever going to sign the form, and no way even the most dozy Ombudsman would make them.

    At that point, between the analysis and the report, if the adviser states that the client's case is "in the balance", and the client commits to buying that report, then the client is trapped.
    by ZingPowZing
    Not at all. They are free to either ask HL to provide a full recommendation, or ask another adviser to provide a full recommendation, or do nothing and stay in the DB scheme. They are not trapped in the slightest. What they paid for the Transfer Value Analysis is a sunk cost - they have got what they paid for.

    The adviser will simply gather information sufficient to justify a negative recommendation.
    Doesn't matter as once you have had a full recommendation, positive or negative, you have what you need to transfer.

    Their small print states that HL will not "facilitate" a transfer for an insistent client.
    That means they won't allow you to transfer the DB pension to HL without a postive recommendation. Once you had paid for and received a full recommendation however, you would have been able to transfer to a different SIPP provider that accepts "insistent clients". However you apparently stopped short before this stage.
    • Malthusian
    • By Malthusian 5th Aug 19, 3:54 PM
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    Malthusian
    The OP is however absolutely correct in one sense. Just not for the reason he gives. If you are going to take advice on a DB transfer it should be from an Independent Financial Adviser, not a restricted sales outfit like HL.

    There's nothing hypocritical about HL accepting DC to DC transfers where the original transfer came from an insistent client DB transfer. Firstly, they have no way of never knowing that it was originally an insistent DB transfer. Secondly, the principle here is that you shouldn't accept money from someone for helping them hang themselves. In the case of a DC to DC transfer the client has already hung themselves (if the DB transfer was a bad idea) so HL is not culpable and there is no hypocrisy.
    • Albermarle
    • By Albermarle 5th Aug 19, 4:12 PM
    • 1,564 Posts
    • 997 Thanks
    Albermarle
    If your employer is trying to get people out of the DB scheme and pays an Independent Financial Adviser on its employees' behalf to advise them, that IFA can't sign off the advice.
    Are you sure about that?
    I have just reread the last CETV offer I had last year. The company offered the services of an IFA at the company's expense.
    Quote' they will provide a clear written recommendation on whether or not you should accept the offer; and they will have a direct duty to you to offer structured and unbiased advice '
    • Malthusian
    • By Malthusian 5th Aug 19, 4:28 PM
    • 6,758 Posts
    • 10,953 Thanks
    Malthusian
    Are you sure about that?
    Originally posted by Albermarle
    Now you've asked I'm not, and Money Advice Service certainly suggests I'm wrong (they say it is good practice for employers to pay for advice).

    I'm now confused as to what Section 48 does mean by "independent advice", as it certainly isn't in the "IFA" sense.
    • ZingPowZing
    • By ZingPowZing 5th Aug 19, 5:12 PM
    • 120 Posts
    • 36 Thanks
    ZingPowZing
    Malthusian - Hargreaves Lansdown provided a full transfer recommendation. They provided a declaration to the effect that they had provided advice. What they wouldn't do is engage with an alternative SIPP provider and my experience was that I was unable to transfer because the compliance dept of every potential SIPP provider that I approached advised that they would not accept the transfer without the signature of HL's financial adviser on their own form.
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