Time wasting IFA - Grrrrrrrrr

[bungeejumper]

Does anybody know the simplest and most efficient process for consulting an IFA about transferring out of a with profits pension policy and into my Hargreaves SIPP? I've just been right royally p1ssed about by an IFA who has wasted four weeks of my time, and I want to crack on with the process asap.

I have a with profits plan with Phoenix (more than £30K, less than £100K) which is due to "mature" on my 70th birthday in two weeks' time. (I could let it run further, but that might mean missing the current final bonus.) The fund represents only a small proportion of my total retirement stash - barely 15% of my liquid assets, or 6% if I include the value of the house - and I am distinctly unimpressed by the miserable rate on offer - I'd have to live 19 years to recoup my stash in even nominal terms! (And I've had a health condition, now cured and hopefully gone for ever. But enough said?)

The Phoenix illustration confirms that there are no MVRs and no early exit penalties on this policy. But nor is there any indexation to the benefit. I do understand why the FCA rules require me to run my plan past an adviser first, because after all, I'm proposing to exit from a guaranteed income, and I also get it that the advisor needs to do a proper discovery in order to cover his own back. But why the effing heck did this IFA have to spend an hour listening to my plan, then quote me a price, then start the process, then go silent on me for four weeks, and then come back and say he wasn't interested in a one-off process because his firm was focused only on long term full service arrangements?

I am spitting teeth about the delay. What's a faster way of getting this done?

TIA

BJ

[UncleEbenezer]

Another IFA might take a different view - have you asked around?

I'm reminded of a possible analogy about ten years ago, when I received a generous redundancy payment. It was conditional on signing an agreement that included a bunch of clauses which I presume to be perfectly normal, and getting that dealt with by a lawyer - presumably something about protecting them from a "didn't know what I was signing" argument.. I had neither desire nor intention to do anything that would cause concern to my ex-employer. With not the merest chance of straying into a grey area re: the agreement, I was happy to sign and didn't want any actual advice or explanation.

I asked around local lawyers for a quote just to countersign. Most of them had a standard fee for that: something north of £200 IIRC. But one of them quoted me something around one third of that, so I went to him! Turned out to be a surprisingly pleasant fellow, and of an age where many have retired.

From memory, I must've asked half a dozen or so. Just the one offered No Nonsense.

[AsleepInYorkshire]

Does anybody know the simplest and most efficient process for consulting an IFA about transferring out of a with profits pension policy and into my Hargreaves SIPP? I've just been right royally p1ssed about by an IFA who has wasted four weeks of my time, and I want to crack on with the process asap.

I have a with profits plan with Phoenix (more than £30K, less than £100K) which is due to "mature" on my 70th birthday in two weeks' time. (I could let it run further, but that might mean missing the current final bonus.) The fund represents only a small proportion of my total retirement stash - barely 15% of my liquid assets, or 6% if I include the value of the house - and I am distinctly unimpressed by the miserable rate on offer - I'd have to live 19 years to recoup my stash in even nominal terms! (And I've had a health condition, now cured and hopefully gone for ever. But enough said?)

The Phoenix illustration confirms that there are no MVRs and no early exit penalties on this policy. But nor is there any indexation to the benefit. I do understand why the FCA rules require me to run my plan past an adviser first, because after all, I'm proposing to exit from a guaranteed income, and I also get it that the advisor needs to do a proper discovery in order to cover his own back. But why the effing heck did this IFA have to spend an hour listening to my plan, then quote me a price, then start the process, then go silent on me for four weeks, and then come back and say he wasn't interested in a one-off process because his firm was focused only on long term full service arrangements?

I am spitting teeth about the delay. What's a faster way of getting this done?

TIA

BJ

Hi BJ

Sorry to hear you have been messed around. Hopefully someone on a much more impressive pay grade will come along to offer you the assistance you need. However, in the meantime may I be the first to offer you a very happy and isolated upcoming birthday. I do think you need to let your hair down a little more though and perhaps you can pop into the Snug closer to the time and allow us all, well at least me, to have a hearty laugh at with you.

Take care

AiY

[Chrysalis]

Just to double check, does this policy have a guaranteed annuity rate? If so what is it?
Are you absolutely sure you are required to take advice? (A with profits investment by itself with no GAR would not require advice to transfer). Usually policies with GARs offer rates that are much more favourable than standard annuity rates. From your description I am just wondering if you’ve simply had an annuity quote? If you aren’t sure, ask your provider if the policy has any safeguarded benefits.
Also, if the advice is unfavourable (which it could well be depending on the nature of the guarantee and your other circumstances) are you sure Hargreaves Lansdowne will accept the transfer?
Finally, could HL help you with an adviser? I hear a lot about their service levels, and it would seem to be in their interests to facilitate you finding the appropriate advice.

Also, if you were quoted a price and accepted it, then is the adviser in breach of contract? A formal complaint seems in order at the least.
But the only practical solution is to get on the phone and find someone else. Making sure (in writing) that they know exactly what you want from them.

[bungeejumper]

Thank you to all of you. Sorry I've been so late in responding to this. Other emergencies.

I was in contact with Phoenix about five years ago - the last time I thought seriously about transferring this policy out - and they were pleasant but also quite adamant that I would need to consult an adviser. I think the FCA's consultation requirement cuts in if there's more than £30,000 in the pot and if there's a guaranteed income that I'd be saying goodbye to if I transferred out. It's a good rule, because it might save some poor soul from acting rashly with the only pot he's got, but my situation is different.

So yes, it's a guaranteed income, in flat and un-indexed terms. But no, it isn't an attractive offer, and it'll get rather less attractive if inflationary pressures resume. And no, the fund doesn't represent a critical proportion of my retirement stash, but I want to access it so that I can help my family out. Finally, of course, I'd appreciate getting the 25% contingent tax free before Rishi abolishes it.

HL's telephone staff are always very helpful, but I'd be surprised if they were able to arrange "independent" advice because they'd be an interested party! But you're right, I should give them another call, just to make sure.

In the meantime, I've pitched another adviser request into Unbiased, making my wishes doubly clear, and I've had a response which I'll now follow up. Will have to see where that one goes.

Thanks again!

BJ

[scrumpyjack]

I seem to recall a poster here saying some time ago that in this circumstance if you can say to the adviser, and evidence it, that you don't need the income from the fund and wish to pass the fund on to your offspring without talking an income from it, it is much easier for them to advise that it is in your interests to transfer the fund.

That seems logical to me anyway!

[vrdiver]

Just in case your current adviser doesn't work out, I have had experience with Better Retirement Group, who were able to process a DB -> SIPP advice request quite quickly when asked to.

The specific IFA we had doesn't work there anymore (I can PM you his linked-in contact info if you wanted it) but I'm assuming the group structure means the service will be the same regardless.

VRD

[taken2often]

As long as you are very clear about what you want. Then my suggestion is to find an IFA. Tell them that you intend to transfer. Ask them how much they would charge you to write a letter stating that after considering the facts. Under no Circumstances should you transfer out. Job done IFA consulted no company could stop you transferring. It is your money and you have complied with the rules.

I think some use a percentage of the fund as a charge and still tell you the same thing.

Anyway I think that there are more advantages taking the fund than leaving it. Depending on your knowledge and experience of investing which you can learn. Not intending to use the fund for a good number of years. The benefits can be, no 50% reduction for Wife or Partner's pension on death, more PCLS due to growth, higher income when you start to take income (take 80%0 reinvest 20% each year. IHT benefits. If you invest for income you can forget the capital sum swings. It is the growing income that counts.

I transferred a Section 32 pension with a good index in 2008. After a few years the natural income was way above the indexed pension, reinvested it is miles larger than the starting sum.

[mc2fool]

As long as you are very clear about what you want. Then my suggestion is to find an IFA. Tell them that you intend to transfer. Ask them how much they would charge you to write a letter stating that after considering the facts. Under no Circumstances should you transfer out. Job done IFA consulted no company could stop you transferring.

Not so, they can if the letter says that under no circumstances should you transfer out! Some may accept a transfer against advice but not all will. E.g.

"Fidelity will only accept transfers from defined benefit pension schemes if you have taken financial advice and the advice confirms that it is in your best interests to transfer." https://www.fidelity.co.uk/approaching-retirement/transferring-final-salary-pensions/

(Presumably they'll apply the same to any pension over £30K with a guaranteed income.)

[taken2often]

You may be right each company will have their own wishes, but i doubt they could legally not make the transfer. On the other hand the new provider may be sticky about accepting it. This would mean that you would be better having it all organised before naming the new provider. What would be more important would be that you are not being pressured into making a transfer to a dodgy company.

Any way you should have the freedom to make your own choices or mistakes

One other point that I had not thought of is if you keep the original pension you would be protected if the annuity company went bust, rare but it could happen. The economy over the next five years is going to be very strange I think.

[taken2often]

One other option has come to mind.
If you tell the IFA that you do not ever wish to draw the pension and have other funds ,work etc then the only option would be to transfer out.

I am in the lucky position that I will never draw funds from my Sipp.

[taken2often]

Very interesting article in the Sunday Times to-day 24/01/2021 by a Katherine Denham It seems that there were changes to the rules in October. They are trying to create an abridged quick decision usually a no. If you wish to continue in depth 2.5% of the fund up to a maximum of £7,500 and they still may say no. IFA are nervous of this because whatever the decision they could be wrong. For example they so and the client dies within the year.

Although some may think this was created for IFA's I think it was lobbied by the the Pension Providers to stop the leakage. According to the article between October 2018 and March 2020 87,491 applied for transfer. 2,936 transferred against the advice of the IFA's. They are moves to try and get the pension companies to pay for the advice.