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  • FIRST POST
    • ZingPowZing
    • By ZingPowZing 3rd Aug 19, 4:58 PM
    • 138Posts
    • 42Thanks
    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 3
    • stephenadarglas
    • By stephenadarglas 5th Aug 19, 5:55 PM
    • 64 Posts
    • 15 Thanks
    stephenadarglas
    I've read nothing here that will stop me using HL. The OP has no justification for his 'don't use HL' comment.
    • jsinc
    • By jsinc 5th Aug 19, 6:13 PM
    • 199 Posts
    • 99 Thanks
    jsinc
    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.
    Originally posted by Malthusian
    My former employer paid advisers on employees' behalf to advise them, and that adviser signed off. Not sure if it makes a difference but company was being wound up, and involved DC + RST underpin (deferred annuity) rather than usual DB transfer.
    • DairyQueen
    • By DairyQueen 5th Aug 19, 6:36 PM
    • 924 Posts
    • 1,694 Thanks
    DairyQueen
    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.
    Originally posted by Blackbeard of Perranporth
    Wrong. There are circumstances when a DB transfer is the best option for an individual. I am one of those individuals. For most people it's a bad idea but there are exceptions.

    I have reduced life expectancy.
    OH is well-pensioned and had no need of the widower's benefits.
    I have a high risk tolerance.
    I am no expert but have been managing a self-invested portfolio for some years.
    We have sufficient guaranteed, retirement income to cover all non-discretionary expenses and also have other assets.
    My DB pension was poorly index-linked.
    I received a x32 CETV offer.
    I have no dependents and no children. My nephews are the beneficiaries of my estate.

    My circumstances are such that a positive recommendation was expected, and the right (and common sense) decision for me. Greed and/or need of cash didn't enter the equation.

    The ceding scheme also paid my IFA fees. Lucky me. So, yes. Mathusian, it's good practice for the (ex) employer to foot the IFA bill, regardless of the recommendation.

    Given that OP was an insistent client I assume that his/her circumstances were not exceptional.
    • Blackbeard of Perranporth
    • By Blackbeard of Perranporth 5th Aug 19, 8:14 PM
    • 6,328 Posts
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    Blackbeard of Perranporth
    So after over a week we are no closer to the truth as to why OP insisted on a DB transfer at all?
    Cardiac Arrest - Electrical - Patient unconscious! Heart Attack - Plumbing - Patient conscious!
    Defibrillators Cannot Cure a Heart Attack!
    • Blackbeard of Perranporth
    • By Blackbeard of Perranporth 5th Aug 19, 8:42 PM
    • 6,328 Posts
    • 36,940 Thanks
    Blackbeard of Perranporth
    Wrong. There are circumstances when a DB transfer is the best option for an individual. I am one of those individuals. For most people it's a bad idea but there are exceptions.

    I have reduced life expectancy.
    OH is well-pensioned and had no need of the widower's benefits.
    I have a high risk tolerance.
    I am no expert but have been managing a self-invested portfolio for some years.
    We have sufficient guaranteed, retirement income to cover all non-discretionary expenses and also have other assets.
    My DB pension was poorly index-linked.
    I received a x32 CETV offer.
    I have no dependents and no children. My nephews are the beneficiaries of my estate.

    My circumstances are such that a positive recommendation was expected, and the right (and common sense) decision for me. Greed and/or need of cash didn't enter the equation.

    The ceding scheme also paid my IFA fees. Lucky me. So, yes. Mathusian, it's good practice for the (ex) employer to foot the IFA bill, regardless of the recommendation.

    Given that OP was an insistent client I assume that his/her circumstances were not exceptional.
    Originally posted by DairyQueen
    No question your circumstances are different to OP.

    Question is that OP has not given us the reason why he went again HL advice!
    Cardiac Arrest - Electrical - Patient unconscious! Heart Attack - Plumbing - Patient conscious!
    Defibrillators Cannot Cure a Heart Attack!
  • jamesd
    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.
    Originally posted by Blackbeard of Perranporth
    You really need to talk with better IFAs, or perhaps they were just replying to you based on their knowledge of your preferences.

    In current conditions I normally expect to see drawdown income 50% higher than a private sector DB pension, with 100% spousal pension, better inflation increases (not usually nil or capped at 2.5%), low chance that income will fall as low as the DB, inheritance likely and the option to guarantee much of the income, retire earlier and better match income to varying spending needs. For suitable candidates it can be life changing in a very good way.

    A close to no brainer transfer case would be a scheme paying 3% of the CETV as income, 50% spousal pension, no inflation increases on half the income and CPI capped at 2.5% on the rest. If it's a couple close to state pension age they could defer claiming their state pensions to get also st twice the income with uncapped inflation increases and approaching 90% of the full DB as spousal pension, and actually better than that when inflation i accounted for.

    At the other end would be someone in say the LGPS with its poor transfer value, hatred of investment volatility, long life expectancy and far from state pension age.

    Appropriate advice for the two situations is radically different and the second one would be triaged away from transfer advice unless there was some other major factor. While the first with higher guaranteed income, better inflation protection for the income and higher spousal pension income after inflation should expect a recommendation to transfer.

    There are just too many variations to be absolute about it.
  • jamesd
    Malthusian - Hargreaves Lansdown provided a full transfer recommendation. They provided a declaration to the effect that they had provided advice
    Originally posted by ZingPowZing
    Just to ensure that I understand this correctly, did:

    A. HL provide the legally specified statements that they provided advice about the transfer, they had the permissions, their FCA number and your and the scheme's names?
    B. and did the DB scheme accept that and agree to proceed with a transfer?

    What did they tell you about not facilitating before you agreed to buy the service from them?
    • ZingPowZing
    • By ZingPowZing 6th Aug 19, 7:24 AM
    • 138 Posts
    • 42 Thanks
    ZingPowZing
    Just to ensure that I understand this correctly, did:

    A. HL provide the legally specified statements that they provided advice about the transfer, they had the permissions, their FCA number and your and the scheme's names?
    B. and did the DB scheme accept that and agree to proceed with a transfer?

    What did they tell you about not facilitating before you agreed to buy the service from them?
    Originally posted by jamesd
    jamesd - HL provided a declaration with all permissions but that wasn't sufficient to effect a transfer to an alternative provider, in my experience.

    Naturally a client will ask about their process, what happens in the event of a negative recommendation? "Then you just find an alternative provider." They state that there are reputable firms willing to accept such transfers without the signature of a financial adviser on their application forms. I still don't know who they are.

    HL are covered in their t and c's, which is a single sheet slipped into their paperwork at the outset, but that is not how they sell the service. The denouement of going through the phone-book before the deadline, trying to find an alternative provider willing to provide a haven is one that I wish to warn others against on this thread.

    I know I made outsiders' mistakes. My main concern at the outset was losing the whole pension to a scam. As the best known name in the business, they will continue to attract potential insistent clients, but Hargreaves Lansdown's first priority is their own interest imo.
    • uk03878
    • By uk03878 6th Aug 19, 7:54 AM
    • 131 Posts
    • 102 Thanks
    uk03878
    So are you Mr M then?
    https://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=216717
    • Prism
    • By Prism 6th Aug 19, 8:14 AM
    • 1,156 Posts
    • 874 Thanks
    Prism
    Naturally a client will ask about their process, what happens in the event of a negative recommendation? "Then you just find an alternative provider." They state that there are reputable firms willing to accept such transfers without the signature of a financial adviser on their application forms. I still don't know who they are.
    Originally posted by ZingPowZing
    Why didn't you try and find one of those providers first with the knowledge that it was unlikely that HL would recommend a transfer at all, before paying for a service that you would find of little other benefit
    • Malthusian
    • By Malthusian 6th Aug 19, 8:49 AM
    • 6,773 Posts
    • 10,972 Thanks
    Malthusian
    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.
    Originally posted by ZingPowZing
    As I understand it the advice was negative, and I only know of one SIPP provider that will accept DB transfers without a positive recommendation (aka insistent clients). So if you were approaching multiple SIPP providers the form was not the issue. With one exception, none of those multiple SIPP providers would have accepted the transfer regardless of whether HL provided the declaration on HL's own letterhead, the new SIPP provider's form, or a 20-foot tall neon sign strapped to the side of a cow.

    (I am open to the possibility that there are one or more SIPP providers open to insistent clients that I don't know about. But so far every time I've asked if there are others, I've been given names that have now stopped accepting insistent clients.)

    If you approached that one SIPP company, in possession of HL's declaration which met with all legal requirements, and they refused to accept the transfer on the grounds that they wouldn't accept HL's declaration that advice had been given, and insisted on HL signing their own declaration, it was the new SIPP company being intransigent.

    Not HL, they'd done their job and they can't be forced to jump through other people's hoops when they'd provided all that was legally required.

    In that scenario a complaint to the new SIPP company would seem the obvious way forward.

    Though it might not get you anywhere as the Ombudsman can order redress for the inconvenience but can't force anyone to do business with you.

    (No, I'm not going to name that provider that accepts DB insistent clients. Other people in the pub will probably stick their neck out. I am not going to as that's too close to advice.)
    • ZingPowZing
    • By ZingPowZing 6th Aug 19, 9:02 AM
    • 138 Posts
    • 42 Thanks
    ZingPowZing
    Why didn't you try and find one of those providers first with the knowledge that it was unlikely that HL would recommend a transfer at all, before paying for a service that you would find of little other benefit
    Originally posted by Prism
    Firstly, I was given to think that finding such a provider would be an easy step. Full disclosure, my expectation was that they would recommend another reputable provider and, perhaps, complete the paperwork! I was green but the reality seemed to me reckless and dangerous and still does.
    Secondly, my financial adviser told me that my case was marginal and "in the balance." But it was only in the balance until I agreed for him to go forward with the final recommendation, then his judgement moved towards a recommendation that, in hindsight, was inevitable.

    My warning is not simply that potential clients get caught for a big fee but that they may get a recommendation based on the interests of Hargreaves Lansdown.

    The Financial Ombudsman takes six weeks - I learn - to publish a final decision. So mine should be in case studies c the first week in September.
    I am not Mr O
    • ZingPowZing
    • By ZingPowZing 6th Aug 19, 9:12 AM
    • 138 Posts
    • 42 Thanks
    ZingPowZing
    Well that is a very interesting response, Malthusian.

    Hargreaves Lansdown induce clients to commit to a full report on the promise of there being reputable alternative providers willing to accept a transfer on their negative recommendation.

    They are setting up insistent clients to fail.
    • ZingPowZing
    • By ZingPowZing 6th Aug 19, 9:27 AM
    • 138 Posts
    • 42 Thanks
    ZingPowZing
    "Not HL, they'd done their job and they can't be forced to jump through other people's hoops when they'd provided all that was legally required. "

    For anybody picking up the thread after the start, I had already found an alternative SIPP provider willing to accept the transfer and completed the application. All my adviser had to do was come to reception at Hargreaves Lansdown and sign a declaration to the fact that he had provided financial advice. Hardly jumping through hoops.

    In the event, the deadline passed, I employed another IFA and -surprise-got a positive recommendation.
    • Albermarle
    • By Albermarle 6th Aug 19, 9:59 AM
    • 1,564 Posts
    • 997 Thanks
    Albermarle
    A close to no brainer transfer case would be a scheme paying 3% of the CETV as income
    Jamesd - Something I am a bit confused about so maybe you can help.
    If your DB scheme has a NRD of 65 and has a projected pension of 15,000 pa ( as an example )
    At 60 years old you are offered a CETV of 450K or the possibility to take the DB pension early but reduced to say 12K ,
    Is the scheme offering an income of 3.33% on the CETV ( 15K /450K ) or 2.66% ( 12K/450K) ?
    Or in other words a multiple of 30 or 37.5 ?
    I suppose one issue is if you have an extra 5 years to make the money last .
    • Malthusian
    • By Malthusian 6th Aug 19, 10:34 AM
    • 6,773 Posts
    • 10,972 Thanks
    Malthusian
    Hargreaves Lansdown induce clients to commit to a full report on the promise of there being reputable alternative providers willing to accept a transfer on their negative recommendation.
    Originally posted by ZingPowZing
    There are. If we take the plural for the singular.

    They are setting up insistent clients to fail.
    If insistent clients can't be bothered to put in the legwork to find a SIPP provider that will accept them that's not HL's problem.

    A simple post on this forum along the lines of "Can anyone tell me which SIPP provider(s) still accept insistent DB clients?" would probably do the job. As would a Google search for previous threads along the lines of "site:forums.moneysavingexpert.com insistent client sipp provider".

    For anybody picking up the thread after the start, I had already found an alternative SIPP provider willing to accept the transfer
    Was that provider aware that at the time, you didn't have a positive recommendation?

    All my adviser had to do was come to reception at Hargreaves Lansdown and sign a declaration to the fact that he had provided financial advice. Hardly jumping through hoops.
    All your new provider had to do - assuming they were one of the small number that would accept DB transfers without a positive recommendation - was accept the declaration that Hargreaves Lansdown had already provided.

    As a rule pension providers do not complete each other's paperwork. When Pension Company A sends a form to Pension Company B, Pension Company B throws it away and sends back a standard document which says at the top "Here is all the information that would go on your form if we could be bothered to hunch over other companies' forms". They are all well used to this. If your new provider had been willing to accept a transfer without a positive recommendation, there is no reason they should not have accepted HL's declaration.

    If your provider wasn't the only provider (or one of the only providers) that accepts insistent clients, then your adviser was correct to save his shoe leather as it would have made no difference if he had skipped down to reception, signed the declaration and sealed it with a kiss. The provider would not have accepted it anyway.

    Unless of course the form that your new provider wanted HL to sign said "I confirm that I have provided my client with a positive recommendation to transfer", in which case HL were correct not to sign it because they hadn't.

    It may help at this point if you tell us which SIPP provider you were trying to use at that time, because then we will know whether they would have accepted the transfer without a positive recommendation.

    Once you employed a new IFA and got the answer you were looking for, all this was moot as the entire wide shining sea of the SIPP market opened up to you and your positive recommendation to transfer.
    • Blackbeard of Perranporth
    • By Blackbeard of Perranporth 6th Aug 19, 11:27 AM
    • 6,328 Posts
    • 36,940 Thanks
    Blackbeard of Perranporth
    Mr M, I have read the ombudsmen report on you case against HL. To me it appears you did not want to pay for their advice, but had to do so for you to transfer your DB Scheme. From reading it, it appears that your attitude of 'I know better, has worked against you in this case.


    Your only complaint in reality is that you did not want to pay for advice, and wanted to draw on your pension, or as I said earlier on the other thread ---
    BoP interprets for most of us who cannot wait.


    OP transferred their DB Pension scam at age 55, spent his dosh and wants recompense. We await his good news!


    Don't worry, his good fortune will soon go up in smoke like the last bag of cash.


    Dave, aged 58 and a quarter!
    Originally posted by Blackbeard of Perranporth

    I hope, Dave, sorry M you enjoyed your world cruise!
    Ombudsmen Report?
    https://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=216717
    Cardiac Arrest - Electrical - Patient unconscious! Heart Attack - Plumbing - Patient conscious!
    Defibrillators Cannot Cure a Heart Attack!
    • nigelbb
    • By nigelbb 6th Aug 19, 11:35 AM
    • 2,625 Posts
    • 3,395 Thanks
    nigelbb
    Mr M, I have read the ombudsmen report on you case against HL. To me it appears you did not want to pay for their advice, but had to do so for you to transfer your DB Scheme. From reading it, it appears that your attitude of 'I know better, has worked against you in this case.


    Your only complaint in reality is that you did not want to pay for advice, and wanted to draw on your pension, or as I said earlier on the other thread ---



    I hope, Dave, sorry M you enjoyed your world cruise!
    Ombudsmen Report?
    https://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=216717
    Originally posted by Blackbeard of Perranporth
    That's not the OP. The OP says their case hasn't been published yet & the facts as described are anyway different.
    • Blackbeard of Perranporth
    • By Blackbeard of Perranporth 6th Aug 19, 11:55 AM
    • 6,328 Posts
    • 36,940 Thanks
    Blackbeard of Perranporth
    That's not the OP. The OP says their case hasn't been published yet & the facts as described are anyway different.
    Originally posted by nigelbb
    I bet they are not far indifferent to the ones already published?
    Cardiac Arrest - Electrical - Patient unconscious! Heart Attack - Plumbing - Patient conscious!
    Defibrillators Cannot Cure a Heart Attack!
    • LHW99
    • By LHW99 6th Aug 19, 12:28 PM
    • 2,197 Posts
    • 2,049 Thanks
    LHW99
    Once you employed a new IFA and got the answer you were looking for, all this was moot as the entire wide shining sea of the SIPP market opened up to you and your positive recommendation to transfer.
    I do find it interesting that within (presumably) a short time, two different IFA's could come to opposite conclusions on the same question.
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