IFA cost to authorise defined benefit pension transfer

[Dissimilitude]

I'm about to transfer a pension from a small defined benefit pension (approx £1100 a year, from age 60), into my current pot.

The cash transfer value is about £70k, so I legally need to take advice from an IFA.

Can anyone give me a ball park cost for this? I was hoping it would be a quick 15-min chat, a £150 for an hour of their time, and a signature. But now having looked around, I am seeing quotes based on the value of the pot being transferred.

This seems...excessive.

Any IFAs around that could clarify or help, here? Thanks!

But do the FCA actually review applications on a case by case basis @Dindundundundeeer? Or are the IFAs simply working to FCA principles and bound by the constraints of their compliance departments?

both! Does it matter though?! We HAVE to work to their requirements - what we do is covered by the law. Then the FCA undertake thematic reviews and review all the cases undertaken by a firm (for which you pay) and if you don’t meet the standards they shut down your business.

Believe it or not we are the most regulated of the professions. We have a regulator and 2 ombudsman’s … and a host of ambulance chasers!

What this does is leave the advisers that don’t care and will happily operate outside the law. The lack of understanding on financial products is shocking though so consumer do need protection, but it feels like it’s gone too far.

If your case stacks up @MidLifeCrisis007 you will find someone to do it, but expect it to be a big job, not just a rubber stamp.

BUT the FCA is totally going against the spirit of the 2015 legislation which aimed to give people greater freedom to invest and spend their pension pots as they chose. Surely people who want to leave a DB scheme should simply have to sign a disclaimer saying that they understand the risks of what they are doing?

As it stands, only the very rich seem able to escape them. So the rich get richer, and the poor get poorer.

One of my key reasons for wanting to do it is to have something to pass on to my kids. If I died prematurely after being advised by some reputable advisor to stay in my fund (and my scheme payments would stop soon after when my youngest hit 23) then would they compensate my kids? No. Because I'd be dead I couldn't go after them. But they fear me going after them if I buy myself a Lamborghini etc and run out of cash...

Is there any way to “self certify” here, or at least reduce the legal liability on the IFA - e.g. if I’m actually an actuary?

Yep, but no one controls the FCA. I think they are out of control, but no one cares. An IFA complaining is just us moaning that we can’t treat clients as our personal piggy bank - that seems to be the view, not the reality in my own experience.

Write to your MP the root cause is the legislation that puts FA as the gatekeepers. If you could do as you describe, we would only advise those that want it.

How the FCA can decide most transfers are unsuitable and not be giving advice is frankly laughable, but that’s where we are.

@Bonheurdupasse

Is there any way to “self certify” here, or at least reduce the legal liability on the IFA - e.g. if I’m actually an actuary?

No. You could in theory proceed as an insistent client, but the ombudsman finds against those cases so no one (who wants to serve their other clients) will do it.

If I died prematurely after being advised by some reputable advisor to stay in my fund (and my scheme payments would stop soon after when my youngest hit 23) then would they compensate my kids? No. Because I'd be dead I couldn't go after them.

We are told that life insurance covers this space.

By the way, I’m not saying you can’t do this, but I’m saying you can’t expect a rubber stamp approach.

MidLifeCrisis007 - as a PP stated, in this instance, if the primary driver of the transfer is a legacy, then a Whole of Life policy for the value of the pension pot should be inititated and paid for out of the guranteed income that comes from the DB scheme when in payment.

Granted, this excludes the sum assured, health and disposable income concerns. However, this is what IFA's are measuerd against, and they can not move from this stance

More like £5k, I have one worth £106k no one would touch it.
I did manage to move one worth £325k about 5 years ago but with very restrictive growth so the IFA did recommend moving it. The chances are you pay a fortune and the recommendation is not to move it unless there are exceptional circumstances like terminal illness.

@dreamkitchenhelp

More like £5k, I have one worth £106k no one would touch it. I did manage to move one worth £325k about 5 years ago but with very restrictive growth so the IFA did recommend moving it. The chances are you pay a fortune and the recommendation is not to move it unless there are exceptional circumstances like terminal illness.

Yes or lots of other assets.

I'm doing one now, it's £1.3M and not the only assets that the client holds. It's as someone above noted only for the rich. Outrageous, but there it is.

@Bard6817

Hi - I was doing some research into using the Grove Pensions Solutions 'Insistent Client' service for transferring a DB pension scheme and came across your post from April 2021.

I have initially been advised not to transfer by DB scheme but they have an insistent client option I can use but they also say that in theory they can refuse that too! Just wondering if you used the insistent client option and if so, was there anything in particular that I should do or know to be able to get the transfer through?

Hope you can help!

Thanks in advance.

@Coles1955 You need to be aware that you may have great difficulty in finding a pension provider who will accept a transfer-in without a positive recommendation.

What is it that you are trying to achieve?

@sunseed Royal London seem to accept insistent clients but I assume I still need an IFA to sign a form saying that they have given me advice but I am proceeding anyway. Will an IFA be willing to sign such a form without giving the advice to proceed?

You will need to go through the full advice process for an IFA to be able to sign the form to confirm that you've received advice, and the appropriate risk warnings, regardless of the outcome of whether the recommendation is that you should or should not proceed.

I transferred a £900k DB Pension about 4 years ago and it was a nightmare trying to find an IFA to sign off on it, a colleague of mine was wavering about doing hers and now no one will assist her even though her circumstances are similar to mine. Can honestly say I feel so relieved that I took the plunge in 2018 as I can now take the decision at 57 to retire and draw income as I want it rather than a set annual sum.

It does seem bonkers. I have a DB scheme which will pay be £290 per year from age 60. And yet I can't transfer it even though it's under £30k as the pension providers won't accept it without advice even though it's under the limit.

Really annoying as I have civil service DB pension which is brilliant - so no chance of me being impoverished as a result of moving the one from part time job!

Any idea whether there are pension providers who will accept it?

@AnneElliott After jumping through various hoops, I found out that AJ Bell (SippCentre) and possibly Royal London will accept smaller pots under £30k without having to get advice first.

Thanks @Coles1955. I will try them.

@Bard6817, @Weirdlynormal and anyone else still battling this on.

Can we start a government petition? To allow a waiver for transfers below £250k and/or for people who have reached retirement age?

I did write to my MP and got nowhere

His office was initially incredulous that we can't sign the waiver of all that for smaller transfers.

@Weirdlynormal, I don't want u to take this to the grave, I'd rather free you of that burden as I won't be contacting you from the other side myself

MP then sent it on to fishy Rishi and the reply simply regurgitated the same FCA story

Oh, and I also wrote to FCA who told me it's how government set it

But times are so turbulent now that it's appalling that we are not allowed to convert to drawdown.

If we were to create a petition, any idea how to reach high numbers to sign it?

@Weirdlynormal, just wondering if I could ask u a few questions on PM?

@YogaLite yes, no problem. I’m this name too

@YogaLite have sent PM