IFA Rubber Stamp

phykell · 10 September 2018 at 1:23PM

Hi,

I have a final salary pension but its ongoing management is an issue as any queries I have are dealt with very slowly, if at all. Although I may, in theory, lose some value if I transfer it out, I’m certain that I want to consolidate it with one of my other pensions. Unfortunately, it’s claimed that because the transfer value exceeds a specific amount, legislation applies which requires me to show that I have taken the advice of an IFA. Can anyone suggest the quickest and most effective route? I imagine there will need to be a charge involved even if an IFA is effectively just rubber-stamping the transfer process.

Thanks

dunstonh · 10 September 2018 at 1:26PM

Unfortunately, it’s claimed that because the transfer value exceeds a specific amount, legislation applies which requires me to show that I have taken the advice of an IFA.

Its because 4 out of 5 DB transfers are unlikely to be justifiable. So, its a bit of consumer protection to prevent people doing the wrong thing.

I imagine there will need to be a charge involved even if an IFA is effectively just rubber-stamping the transfer process.

Cost should be around £4000-£5000. It certainly is not rubber stamping.

xylophone · 10 September 2018 at 1:41PM

it’s claimed that because the transfer value exceeds a specific amount,

It is a fact that if your DB pension has benefits valued at over £30,000, the advice of a Pension Transfer Specialist must be obtained.

https://www.gov.uk/government/publications/pension-benefits-with-a-guarantee-and-the-advice-requirement

https://www.moneymarketing.co.uk/pension-transfer-charges/

This will not be a "rubber stamping exercise".

You are not required to take the advice you have paid for but not all schemes will accept a DB transfer without a positive recommendation - will yours?

https://www.professionaladviser.com/professional-adviser/news/3015853/martin-tilley-sipp-providers-accepting-insistent-clients-is-questionable

tacpot12 · 10 September 2018 at 2:50PM

Quickest and most effective route will be to call around all the IFAs local to you to find one that has permission to provide the advice (you might be able to do this bit via the internet) and who will give you a ballpark cost. Explain that you don't want to waste time meeting with a firm that can't give you a rough idea of the cost.

This advice is getting harder and harder to find as it is seen as high risk, and so carries a premium ecause of the liability insurance that the IFA has to carry.

Good luck, please let us know how you got on.

Dox · 10 September 2018 at 3:13PM

phykell wrote: »

I have a final salary pension but its ongoing management is an issue as any queries I have are dealt with very slowly, if at all.

Ongoing management isn't an issue for you - it's down to the scheme's trustees to ensure the scheme is run in accordance with the rules and any overriding legislation. Transferring out because you find delays in getting answers slow isn't a good reason (and it's hard to understand what you would need to query). Complain if queries aren't answered at all, but you might think about reading your scheme booklet/annual Summary Funding Statement first.

phykell · 10 September 2018 at 3:28PM

Thanks for your reply.

I’ve always been cynical about pensions and this is another example of why I think so little of them. Once again, legislation makes it difficult for the owner of the pension to make an informed choice. I don’t need advice, I don’t wish to pursue a complaint against the administrators of the pension to hopefully improve the fund performance and/or their customer service. I prefer to vote with my feet and deal with a pension provider that *I* have confidence in, having used them for years for my other pensions. An IFA isn’t going to be able to convince me that I should put up with the service I’ve received so the “advice” I want is simply to acknowledge that I’m quite prepared to potentially reduce the value of my fund for the sake of a more reliable provider. As an aside, I can also tell you that the administrator of my pension recently passed my personal details onto a third party; they have subsequently apologised for the error but it’s just one more nail in the coffin as far as I’m concerned.

Incidentally, £4-5k sounds a lot!

phykell · 10 September 2018 at 3:36PM

tacpot12 wrote: »

Quickest and most effective route will be to call around all the IFAs local to you to find one that has permission to provide the advice (you might be able to do this bit via the internet) and who will give you a ballpark cost. Explain that you don't want to waste time meeting with a firm that can't give you a rough idea of the cost.

This advice is getting harder and harder to find as it is seen as high risk, and so carries a premium ecause of the liability insurance that the IFA has to carry.

Good luck, please let us know how you got on.

Thanks - I’m hopefully speaking to a couple of IFAs this afternoon so I should get an idea on how to proceed

HappyHarry · 10 September 2018 at 3:37PM

phykell wrote: »

Thanks for your reply.

I’ve always been cynical about pensions and this is another example of why I think so little of them. Once again, legislation makes it difficult for the owner of the pension to make an informed choice, I don’t wish to pursue a complaint against the administrators of the pension to hopefully improve the fund performance and/or their customer service. I prefer to vote with my feet and deal with a pension provider that *I* have confidence in, having used them for years for my other pensions. An IFA isn’t going to be able to convince me that I should put up with the service I’ve received so the “advice” I want is simply to acknowledge that I’m quite prepared to potentially reduce the value of my fund for the sake of a more reliable provider. As an aside, I can also tell you that the administrator of my pension recently passed my personal details onto a third party; they have subsequently apologised for the error but it’s just one more nail in the coffin as far as I’m concerned.

Incidentally, £4-5k sounds a lot!

It's not a matter of just changing provider.

It's a matter of changing the whole structure of your final salary pension, and removing all the guarantees behind it. This is not a task to be undertaken lightly. It is not usual for such action to be in your best interest, and so finding an adviser to sign off on such a transfer will be difficult, and expensive. The adviser will need to carry the risk of you complaining about this high risk transfer for ever. Certainly phrases like

I’m quite prepared to potentially reduce the value of my fund for the sake of a more reliable provider.

and

I don’t need advice

are going to make any potential adviser you find very, very wary of assisting you with this.

phykell · 10 September 2018 at 3:42PM

Dox wrote: »

Ongoing management isn't an issue for you - it's down to the scheme's trustees to ensure the scheme is run in accordance with the rules and any overriding legislation. Transferring out because you find delays in getting answers slow isn't a good reason (and it's hard to understand what you would need to query). Complain if queries aren't answered at all, but you might think about reading your scheme booklet/annual Summary Funding Statement first.

I think it’s an excellent reason to move and if more people did it, perhaps we’d all receive better service. Personally, I think there’s no excuse these days for providers who don’t provide an online portal to allow their clients to monitor their pensions’ performance on a daily basis if necessary. When I ask for a valuation it can take a matter of weeks for a response!

greatkingrat · 10 September 2018 at 3:49PM

If it is a final salary pension, then the daily performance of the underlying investments is irrelevant, you will receive the same pension whether the stock market goes up 10% or down 10%.

dunstonh · 10 September 2018 at 3:52PM

I’ve always been cynical about pensions and this is another example of why I think so little of them.

It is daft to be cynical of something you dont understand. If you did make even a little attempt to understand them then you will see there is nothing to be cynical about.

Once again, legislation makes it difficult for the owner of the pension to make an informed choice.

The legislation is protecting your from making a mistake.

I don’t wish to pursue a complaint against the administrators of the pension to hopefully improve the fund performance and/or their customer service.

Fund performance is irrelevant to you in a DB scheme. However, it will become relevant if you transfer out.

An IFA isn’t going to be able to convince me that I should put up with the service I’ve received so the “advice” I want is simply to acknowledge that I’m quite prepared to potentially reduce the value of my fund for the sake of a more reliable provider.

DB schemes are not pension providers. You generally expect a poorer quality admin service with DB schemes but in reality, there is only a handful of times in your life you have to deal with them. So, admin is not a valid reason to transfer.

Switching pension providers is much easier and has lower liability issues than a DB transfer.

Incidentally, £4-5k sounds a lot!

Not really. The most common excess on PI insurance for DB transfer complaints is £5000. So, that is line with the excess. You are asking an IFA to do the highest risk advice transaction they can give. A transaction that is considered missold unless proven otherwise. A transaction that can see the adviser bankrupted/firm closed down even if they think they are doing the right thing.

But again, you are commenting from a position of not knowing what you are doing. There are several comments you have made that indicate you do not know what you are doing. And with 4 out of 5 people worse off due to transferring, you haven't said a single thing that suggests it is justifiable to transfer.

edit: (due to post made after reply started)

I think it’s an excellent reason to move and if more people did it, perhaps we’d all receive better service. Personally, I think there’s no excuse these days for providers who don’t provide an online portal to allow their clients to monitor their pensions’ performance on a daily basis if necessary. When I ask for a valuation it can take a matter of weeks for a response!

They are not a provider. You are not invested in anything. You really seem to be quite confused on this. The legislation appears to be working here.

IFA Rubber Stamp

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