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    • PlanToRetire
    • By PlanToRetire 14th Jan 20, 7:13 PM
    • 17Posts
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    PlanToRetire
    Possible Transfer Value and Advice
    • #1
    • 14th Jan 20, 7:13 PM
    Possible Transfer Value and Advice 14th Jan 20 at 7:13 PM
    Good evening, I need some help with a possible Final Salary Pension Scheme Transfer.
    I am 54, and my husband has just retired. I have 3 smaller pensions to the value of about £100,000. My main scheme is a Final Salary and I am thinking of taking it at 55. However I will probably still work part time. If I leave the pension where it is, at 55 I can get a lump sum of £67.5k and a pension of 10k per year.
    The estimated transfer value is 498k and I am considering transferring to a drawdown arrangement. I work for an Investment Company and they offer Pension help, although it does seem to be more Wealth Management. I had the initial consultation with this Company today. However my issue is that they will make a recommendation re the transfer – but if they recommend not to transfer then I can not go ahead with them. The fee of 1% (£5k) still needs to be paid.
    Obviously I will consider carefully the advice given, but if I go through this process and the recommendation is not to transfer then if I do decide to go ahead then I will need to do through the whole process again.
    I looked into this 2 years ago with my previous employer and I decided not to proceed after getting the initial Transfer Value (which was 75k lower), but I do remember that if I decided to transfer regardless of the advice the Financial Advisor would proceed on my behalf
    So my first question is this:

    Is it usual for an Advisor to not assist with a Transfer if they recommend not to transfer?

    As I said, I am prepared to pay for advice, however I know that the Advisor will err on the side of caution – which is understandable – but I feel that if I do decide to Transfer I will have to pay the first Advisor and still be in the same position.

    Therefore the next question is 1% of the Transfer Value reasonable?

    Any help would be most appreciated
Page 3
    • PlanToRetire
    • By PlanToRetire 15th Jan 20, 2:38 PM
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    PlanToRetire
    OP, when having that initial conversation with an IFA, I *suspect* you may be wise to allow them to believe they would manage your pot forever after. Do check on costs/fees to move out later if you wanted to, but if the IFA expects to them be managing your wealth, I would imagine they would be more inclined to want you as a customer

    Of course I could be wrong.....but......

    Good luck!
    Originally posted by cfw1994
    Thanks, I sussed that out pretty quick from my meeting yesterday, so was going to give that impression regardless. Always helps to grease the wheels!
    • Pension Geek
    • By Pension Geek 15th Jan 20, 2:42 PM
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    Pension Geek


    Any evidence? I cannot see how any reasonable legal system would find in favour of such a plaintiff, given that scenario!

    Originally posted by cfw1994
    https://www.ftadviser.com/sipp/2018/09/14/ombudsman-finds-in-favour-of-insistent-client/
    Not an expert, but like pensions, tax questions and giving guidance. There is no substitute for tailored financial advice.
    • JoeCrystal
    • By JoeCrystal 15th Jan 20, 2:58 PM
    • 2,096 Posts
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    JoeCrystal
    And we still haven't gone through the crash yet. I am expecting to see the posts from the people who transferred out of their DB pension schemes and could not stomach the losses they see in their pension pot and ask if they can complain to the advisers about it.
    • ZingPowZing
    • By ZingPowZing 15th Jan 20, 3:08 PM
    • 422 Posts
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    ZingPowZing
    And we still haven't gone through the crash yet. I am expecting to see the posts from the people who transferred out of their DB pension schemes and could not stomach the losses they see in their pension pot and ask if they can complain to the advisers about it.
    Originally posted by JoeCrystal
    Whereas the group of people who followed advice and missed out on the bull run of the last few years will, in the main, never be conscious of the opportunity missed; and those who are have no recourse.
    Didn't hear the train last night doesn't mean it didn't go.
    • ZingPowZing
    • By ZingPowZing 15th Jan 20, 3:13 PM
    • 422 Posts
    • 173 Thanks
    ZingPowZing
    Thanks, I sussed that out pretty quick from my meeting yesterday, so was going to give that impression regardless. Always helps to grease the wheels!
    Originally posted by PlanToRetire
    How did your meeting go, PlanToRetire?

    Your adviser didn't suggest that your circumstances made the case for a positive recommendation
    "marginal", by any chance?
    Didn't hear the train last night doesn't mean it didn't go.
    • cfw1994
    • By cfw1994 15th Jan 20, 3:14 PM
    • 577 Posts
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    cfw1994
    Interesting, thanks.

    Not entirely clear how "the client now has illiquid investments and is unable to take benefits from his pension, but the investments cannot be sold or exchanged for a cash sum without incurring a substantial financial loss"
    Pre-dated the pensions freedoms changes.....& the company was unable to contest the findings.

    A curious clash between the regulator and the ombudsman.
    I am astonished the Ombudsman made their decision reading that. Although clearly we cannot see all the detail there.

    It's a rubbish grey area within "pensions freedom" eh!
    • JoeCrystal
    • By JoeCrystal 15th Jan 20, 3:16 PM
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    • 1,503 Thanks
    JoeCrystal
    Whereas the group of people who followed advice and missed out on the bull run of the last few years will, in the main, never be conscious of the opportunity missed; and those who are have no recourse.
    Originally posted by ZingPowZing
    Well, we will have to wait and see. It is still much too early to see how it will go, but I am one of these people who valued the idea of a DB pension scheme despite never having one. Indeed, if I am going to find a job, finding a job with a DB pension scheme is my main goal! It is really that valuable.
    Last edited by JoeCrystal; 15-01-2020 at 3:18 PM.
    • Pension Geek
    • By Pension Geek 15th Jan 20, 3:22 PM
    • 202 Posts
    • 173 Thanks
    Pension Geek
    Well, we will have to wait and see. It is still much too early to see how it will go, but I am one of these people who valued the idea of a DB pension scheme despite never having one. Indeed, if I am going to find a job, finding a job with a DB pension scheme is my main goal! It is really that valuable.
    Originally posted by JoeCrystal
    I would seriously consider moving from private to public sector and taking a reduction in pay to join a DB scheme, once I have finished all my exams.
    Not an expert, but like pensions, tax questions and giving guidance. There is no substitute for tailored financial advice.
    • Thrugelmir
    • By Thrugelmir 15th Jan 20, 3:36 PM
    • 66,351 Posts
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    Thrugelmir
    However my main issue is that my husband is 9 years older, so if I go after him there will be nothing
    Originally posted by PlanToRetire
    By taking the pension early. You'll be suffering an early withdrawl penalty of ~ 5% pa. Factoring in future rises in inflation this makes a considerable difference to the pension that you will ultimately receive.

    Does the DB pension rise with CPIU or RPI?
    “Risk comes from not knowing what you are doing. – Warren Buffett”
    • PlanToRetire
    • By PlanToRetire 15th Jan 20, 4:00 PM
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    • 20 Thanks
    PlanToRetire
    By taking the pension early. You'll be suffering an early withdrawl penalty of ~ 5% pa. Factoring in future rises in inflation this makes a considerable difference to the pension that you will ultimately receive.

    Does the DB pension rise with CPIU or RPI?
    Originally posted by Thrugelmir
    RPI.

    55 is the dream, it may be anytime up to 60.
    • Thrugelmir
    • By Thrugelmir 15th Jan 20, 4:12 PM
    • 66,351 Posts
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    Thrugelmir
    RPI.

    55 is the dream, it may be anytime up to 60.
    Originally posted by PlanToRetire
    25% plus compounded RPI is a sizable difference in a guaranteed annual start for your pension.
    “Risk comes from not knowing what you are doing. – Warren Buffett”
    • eskbanker
    • By eskbanker 15th Jan 20, 4:48 PM
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    eskbanker
    Interesting, thanks.

    Not entirely clear how "the client now has illiquid investments and is unable to take benefits from his pension, but the investments cannot be sold or exchanged for a cash sum without incurring a substantial financial loss"
    Pre-dated the pensions freedoms changes.....& the company was unable to contest the findings.

    A curious clash between the regulator and the ombudsman.
    I am astonished the Ombudsman made their decision reading that. Although clearly we cannot see all the detail there.
    Originally posted by cfw1994
    The (relatively) detailed info and decision is published at https://www.financial-ombudsman.org.uk/files/219803/DRN9316495.pdf
    • MarkCarnage
    • By MarkCarnage 15th Jan 20, 6:36 PM
    • 173 Posts
    • 137 Thanks
    MarkCarnage
    The (relatively) detailed info and decision is published at https://www.financial-ombudsman.org.uk/files/219803/DRN9316495.pdf
    Not the only one going against this adviser on an 'insistent client' basis either, and if you read the detail of both you can perhaps understand why.....I'm not sure that these would be typical cases for the type of circumstances alluded to above in comments.
    • Albermarle
    • By Albermarle 15th Jan 20, 6:53 PM
    • 2,193 Posts
    • 1,440 Thanks
    Albermarle
    So it really sounds like I need to have the destination SIPP set up first,
    Not sure if you aware but the actual setting up of a SIPP on the internet only takes about 5 or 10 minutes.

    Also regarding the various points about what happens if there is a negative recommendation .
    You probably will not have much trouble with the current DB scheme, as they are desperate to get you off their books as a financial liability - hence the apparently generous offer .
    • Dox
    • By Dox 15th Jan 20, 9:33 PM
    • 1,863 Posts
    • 1,398 Thanks
    Dox
    Ah I see. So much (great) info - I am going to take all day Sunday to go over my options and decide my course of action.
    Originally posted by PlanToRetire
    Have a listen to this edition of Radio 4's MoneyBox, starting 17 minutes 30 seconds in: https://www.bbc.co.uk/sounds/play/b09vwzg4

    It covers the following, which is relevant to your question:
    'Under Financial Conduct Authority rules, if you want to transfer a defined benefits pension of more than £30,000, you must seek guidance first. It's a safeguard against you making potentially disastrous financial decisions - but not an absolute block. That's because under pension freedom, it's your money and your decision. But one Money Box listener who received advice, but chose a different option, found it impossible to get her confirmation letter - which meant her pension transfer couldn't go ahead. Michelle Cracknell, chief executive of the Pensions Advisory Service explains your rights.'
    • PlanToRetire
    • By PlanToRetire 16th Jan 20, 9:23 AM
    • 17 Posts
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    PlanToRetire
    Have a listen to this edition of Radio 4's MoneyBox, starting 17 minutes 30 seconds in:

    It covers the following, which is relevant to your question:
    'Under Financial Conduct Authority rules, if you want to transfer a defined benefits pension of more than £30,000, you must seek guidance first. It's a safeguard against you making potentially disastrous financial decisions - but not an absolute block. That's because under pension freedom, it's your money and your decision. But one Money Box listener who received advice, but chose a different option, found it impossible to get her confirmation letter - which meant her pension transfer couldn't go ahead. Michelle Cracknell, chief executive of the Pensions Advisory Service explains your rights.'
    Originally posted by Dox
    That's really helpful.
    Many thanks
    • Dazed and confused
    • By Dazed and confused 16th Jan 20, 9:33 AM
    • 6,142 Posts
    • 3,265 Thanks
    Dazed and confused
    I suspect all it will take is a significant market crash, nothing out of the ordinary, just similar to those seen in the past and we will move into "PPI" territory.

    At which point people like the op (no offence intended) will start to plead they were misled. Hopefully there will be sufficient audit trail nowadays to show they were going against the professional advice to stay put.
    Originally posted by Dazed and confused


    I cannot understand how that (bold) would possibly be the case. Well, I can imagine them grumbling......
    ....but if a company advised to NOT transfer out, and they did - there is a clear line to the advice that keeps the company entirely in the clear. Nothing like PPI whatsoever, surely - any evidence to suggest otherwise?
    I think you are applying far too much logic.

    If someone is insistent that giving away say a guaranteed £10k/year in return for a lump sum of £400k is a good idea and a year or two later that lump sum is suddenly only £200k someone is going to have to be to blame.

    You and I might have an idea who is at fault but the person sat with £200k isn't likely to see it the same way. Especially when PPI style claim companies start targeting them.
    Last edited by Dazed and confused; 16-01-2020 at 11:42 PM.
    • PlanToRetire
    • By PlanToRetire 16th Jan 20, 1:59 PM
    • 17 Posts
    • 20 Thanks
    PlanToRetire
    Good afternoon all, just a quick update.

    Well, I had almost decided not to even look into the transfer process given all the hurdles. However, I was chatting to a retired friend about this, and he suggested I speak to his IFA who deals exclusively with Pensions and has assisted a quite a few of my pal’s acquaintances with their transfers. He has been my friend’s advisor for the last 18 years (my friend retired 4 years ago), and my friend speaks very highly of him.

    So I have a free first consultation with him next week, and I think given all the info I have receive here and read over the last few days, I will either go with this IFA or not doing anything at all!

    Will update once we have spoken.
    Last edited by PlanToRetire; 16-01-2020 at 2:41 PM. Reason: Clarity
    • happyandcontented
    • By happyandcontented 16th Jan 20, 2:15 PM
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    happyandcontented
    Good plan, I am interested in knowing how this pans out.
    • cfw1994
    • By cfw1994 16th Jan 20, 2:17 PM
    • 577 Posts
    • 541 Thanks
    cfw1994
    Interesting.
    If he has retired 4 years ago......how would he remain 'qualified' to sign off on any advice to you?
    Or can IFAs maintain their 'credentials' (& personal insurance, etc!) beyond retirement?
    Look forward to hearing how it goes!
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