Pension transfer - anyone used a financial advisor?

[YogaLite]

I want to transfer my old deferred defined benefit pension to a different government approved provider to have more flexibility to access it.

There is a (totally unnecessary in my view) obligatory requirement to obtain a financial advice which apparently is expensive.

I had sent some enquiries online and I am waiting to hear.

Has anyone done it? How expensive was it? I just need a one-off waffle from them confirmed by a letter to my pension provider.

Anyone has been through similar? How did u find the "advisor" and what was the cost?

@YogaLite it might be possible to support a case for a transfer being in your best interests but you won't know that until you have sat down with an adviser to thoroughly explore this. I think you have now seen from this thread that there is a great deal of detail that has to be covered, and why it is not "just waffle".

As you are also finding, the reality is that there are not that many appropriately qualified DB transfer advisers (about 1700 I believe) and many have taken a business decision to only deal with larger cases. They would also be looking at the long-term relationship and if your intention is to bust the pot within 5 years you don't, on the face of it, make for an attractive long-term client.

There are some product providers with advice bureaux which might be worth approaching, as an alternative to an IFA, if you just want a transactional service for this. Fidelity and LV are two off the top of my head.

@fromdownwest We don't know anything about OP's health and longevity expectations, numbers around other income and assets or expenditure. You cannot categorically say that a transfer is not happening, because you are not yet in possession of all the facts.

Many thanks @Sunseed and @fromdownwest for now.

One way to look at the value to be gained from "cashing in" a defined benefit pension is to compare the "cash out" value offered with the lump sum that would be required to achieve equivalent, index linked benefit into the future.

The lump sum required to generate the benefits available to you now will be far in excess of the cash out value.

Spend other savings before you cash in a defined benefit pension.

[quote Sunseed]**@YogaLite* it might* be possible to support a case for a transfer being in your best interests but you won't know that until you have sat down with an adviser to thoroughly explore this. I think you have now seen from this thread that there is a great deal of detail that has to be covered, and why it is not "just waffle".

As you are also finding, the reality is that there are not that many appropriately qualified DB transfer advisers (about 1700 I believe) and many have taken a business decision to only deal with larger cases. They would also be looking at the long-term relationship and if your intention is to bust the pot within 5 years you don't, on the face of it, make for an attractive long-term client.

There are some product providers with advice bureaux which might be worth approaching, as an alternative to an IFA, if you just want a transactional service for this. Fidelity and LV are two off the top of my head.

@fromdownwest We don't know anything about OP's health and longevity expectations, numbers around other income and assets or expenditure. You cannot categorically say that a transfer is not happening, because you are not yet in possession of all the facts.[/quote]
Fair point regarding the facts, however I don’t know any advisers who will look at under £250k as a minimum.
However, looking to take a life time index linked (assumed) income for life to convert to a lump sum to spend in 5 years, more than likely paying tax on the 75% should and would never be signed off as suitable advice

I don't agree that everyone should be required to take financial advice. Some people need advice, others don't. There are sharks who will take advantage of people without advice, hence the requirement. But some IFA's who give advice will take advantage by recommending a transfer requiring an ongoing relationship so they can keep milking the client.

But agree or not, you need an IFA's recommendation for a transfer and the feedback on this thread is that you won't get it so seeking IFA approval will simply waste a lot of money.

The feedback is based on incomplete information, so it's possible some relevant facts haven't been posted and would make a transfer recommendation more likely. Otherwise, you should accept a transfer won't be recommended and not to waste your money paying for advice to tell you this.

I took financial advice from a local adviser who told me I should amalgamate all my small investments into one SIPP. He didn't explain what it consisted of and now it's unsaleable. Thankfully 3 of the companies have gone tits up and I've got the full value back in compensation from the FSCS. Just waiting for the final one to go the same way.

This was a local adviser who I thought was a family friend. Having had my fingers burned, I'd be very wary of taking advice again.

Exactly.
Having just spoken to 2 companies in this business, I found out that the fee is high because of their insurance cost, a nice money spinner for insurance. In my case it equals to 2years of pension, generous eh

Can't be bothered to search who and why started this change in the parliament or wherever it was agreed but I am sure it wasnt just for the common good and CEOs of insurance are raking it in nicely.

Sure, some people need/want advice, but it should be optional with a disclaimer for those who are happy to accept their own risk.

Funny enough, having mentioned details of my case in both conversations today, one company said transfer would not be possible while the other that it was possible.

But pretty much all DC pensions are now based on stock market, including NEST so if it was such a con then why do they even exist??

Appreciate all comments, especially from anyone who has been through this and managed to do it.

But pretty much all DC pensions are now based on stock market, including NEST so if it was such a con then why do they even exist??

You've already been told, several times. Google it. Who shoulders the risk to pay out the expected pension in a DB scheme? Who shoulders the risk in a DC scheme?

I'm out of this thread now; i give up.

@RaraRachael

I took financial advice from a local adviser who told me I should amalgamate all my small investments into one SIPP. He didn't explain what it consisted of and now it's unsaleable. Thankfully 3 of the companies have gone tits up and I've got the full value back in compensation from the FSCS. Just waiting for the final one to go the same way.

This was a local adviser who I thought was a family friend. Having had my fingers burned, I'd be very wary of taking advice again.

The OP wants to transfer a defined benefit scheme and there's stringent regulation around that. The existing scheme can only permit a transfer if there's an IFA's recommendation to transfer. Even if she can get that recommendation she then has to find a provider who will accept transfers in on that basis (lots won't). Unfortunately for OP she has no choice but to pay for advice if she still wants to pursue it.

Thanks guys.

I am more than happy to take responsibility for my actions and my pot of gold but sadly government decided to feed the sharks in the process regardless.

@YogaLite

Thanks guys.

I am more than happy to take responsibility for my actions and my pot of gold but sadly government decided to feed the sharks in the process regardless.

Or, the government has decided that the option of taking an index linked guaranteed pension with zero investment risk for life in return for a non indexed, non guaranteed, stock market related, on going fee charging pension should have tighter regulation for the protection of the consumer.

It isn't your pot of gold, it is a guarantee of an income, payable by the trustees of the pension scheme, to you as a member.

As a PP has said, we have all tried to explain to you, why this is now the case, however, if you are still not getting it google 'Steelworkers db transfer scandal'.

Then you will see that if anything the regulator has stopped feeding the sharks! I don't get how not transferring is feeding the sharks? Yes, there will be increased indemnity insurance, but that is more an issue for advisers than you!

The fee is set to cover insurance and profits of the financial advisors company as well as their fees.

I don't want the advice, the guarantee, or the insurance, I don't even want to see them.

In fact I would prefer to donate the very fee to the charity and move on without having the insurance of a come back - has anyone ever come back from the other side to win that particular claim??

So why has the government even set up NEST??

NEST was originally set up when automatic enrolment was introduced, as an option for employees who didn’t already have a pension scheme that met the criteria for automatic enrolment.

It was not set up as a vehicle for people to transfer other pensions into - obviously you can do that, but it’s not the reason it exists!

That first paragraph should say ‘as an option for employers’ not employees!

Yes, I have NEST and I find their admin more efficient than another 2 schemes I have.

Another reason for me to transfer is that it would allow me to make charitable donations out of taxed income and not savings, plus I would like to see the benefit of these donations when I am still alive and well.

@YogaLite

The fee is set to cover insurance and profits of the financial advisors company as well as their fees.

I don't want the advice, the guarantee, or the insurance, I don't even want to see them.

In fact I would prefer to donate the very fee to the charity and move on without having the insurance of a come back - has anyone ever come back from the other side to win that particular claim??

The fee is set to reflec the work and risks involved in the transfer.

The adviser will be paying a minimum of £1,700 just to star the case with the required reports and complex calculations in a detailed TVAS report.

They will then carry the risk for life, that maybe one day, you actually decide that this is not the best option for you, although you may feel like it now, and then claim agains the advsier who has a life long liabilty on pension advice.

The fact that you hold your pensions with NEST, as their admin is good, shows how little understanding you have about pensions. Their funds are basic, and often poor performing, and their platform and admin is miles away from some of the major pension players.

'charitable donations out of taxed income and not savings' How would this differ from a drawdown pot or a DB income? You can still make the donations?

Without sounding harsh, you do not seem like you fully understand pensions, investments or markets. There is nothing wrong with this, however, there is something wrong in this moving you from risk free income to a DC pension.

We have a welfare state. If you access all your pensions and are left with just the state pension there is a higher likelihood you will cost the government more in benefits that if you had this guaranteed income for life, however small.

So yes, there are regulations. For your protection and for the taxpayer.

Are you sure that Nest would accept a transfer in even if you could get the recommendation from the IFA? Not all providers do and it looks as if Nest don't www.nestpensions.org.uk/schemeweb/memberhelpcentre/transfers/criteria-for-transferring-money-into-nest.html

What are the inflation increases on your DB pension? The value of good inflation protection is very evident at the moment.

I don't intend to claim anything from the welfare state except state pension.

U can choose investments risks with NEST too and I am not looking to make millions.

Exactly that, I want to convert to drawdown to top up my income to be able to donate in tax-beneficial way for the charities.

Increases are 3%

So can anyone recommend an advisor local to Hampshire/Surrey?

Oh, SuttonBrooks don't do transfers.

@YogaLite

I don't intend to claim anything from the welfare state except state pension.

U can choose investments risks with NEST too and I am not looking to make millions.

Exactly that, I want to convert to drawdown to top up my income to be able to donate in tax-beneficial way for the charities.

Why are you looking to top up your income, when you can have a guaranteed index linked income for life to 'top up' you income?

I am out of this now, you have been told multiple times that an adviser is unlikely to do this, and if you do find one you will be paying for the priviledge, of which you refuse to do.

So good luck chasing your pot of gold.

@YogaLite

Increases are 3%

Do you mean it is capped at 3% (e.g. cpi up to 3%) or that the most recent increase was 3%. As I said above I don’t think nest will accept this even if you can get the advice so if you are still trying to do this you should ask them/find another provider