Defined Benefit Pension Transfer Advice
Guide to Insistent Clients
What is an Insistent Client?
While this is something that we would consider, it is unlikely we would allow it where the Abridged Advice conclusion was “negative”.
Similarly, even if the outcome was “inconclusive” at Abridged Advice stage, there is no guarantee we would accept an insistent request later, especially if it turns out the transfer value represents very poor value and significant losses would be incurred. Of course, the problem is, we are only going to know this for sure if you have proceeded to Full Advice and we carry out a full transfer value analysis and report.
Key principles against accepting an insistent client
The list below explains some of the reasons why we may not be able to accept an insistent client:
- A substantial lifetime loss if a transfer was to proceed.
- Inability to demonstrate an understanding of the risks of a transfer.
- Inability to demonstrate an understanding of the guarantees that would be lost.
- Vague or unclear objectives which you are unable to expand upon.
- Objectives which are of questionable importance.
- Suspicion you have been coerced or influenced by a third party.
- Refusal to provide key information about your circumstances.
- Financially irresponsible e.g., history of cashing in other pensions.
- Transfer would cause a shortfall in retirement income needs.
You must remember that the regulations are very clear – the starting point to consider defined benefit pension transfers is that it will not be suitable.
The process for proceeding as an insistent client
We have a very strict process when considering accepting someone as an Insistent Client, not least of which is absolutely ensuring they understand the risk and consequences of their actions.
If you were to proceed on this basis, the key points to consider are:
- We will have issued you with a suitability report detailing our recommendation not to transfer.
- You will then need to write to us, in your own words, confirming:
- You have received the suitability report
- Your understanding of its contents
- Your desire to go against our advice and transfer your pension
- Your reasons why you wish to proceed against our advice. Where alternative options form part of our recommendation, such as borrowing, using your savings, or taking benefits direct from your scheme, you will need to explain why these options wouldn’t suit you.
- Upon receipt of your written confirmation, your Grove adviser will contact you to discuss your reasoning and why you wish to proceed as an Insistent Client. The adviser will need to be satisfied you are acting on your own accord and without coercion.
- You must be able to explain, in your own words, why you wish to proceed against our advice, and you will need to be able to demonstrate you understand the consequences of your actions.
- If the adviser is happy to proceed, they will confirm this to you in an email, followed by a new suitability report, confirming their original recommendation not to proceed, your reasons for wishing to go ahead and why the adviser is prepared to accept this as an insistent case.
Do all product providers accept insistent clients?
There is a restricted selection of mainstream companies that are able accept these type of cases. You can check with us first who they are before deciding to go ahead.
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Free Pension Transfer Guide & Initial Consultation
Complete the form below to receive your Free Pension Transfer Guide.
If you would like to find out if transferring or cashing in your pension is suitable for you, we can provide a free initial consultation known as abridged advice.
Simply return the enquiry form included in the guide and post it back in the free post envelope provided.
As part of the consultation we will look at:
- What existing pension plans you have in place.
- Whether you have the right type of pension to transfer.
- What your plans are for retirement.
- How much cash you can release.
- Whether your existing pension remains the best fit for you.
- The likely cost of more in-depth advice.
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Defined Benefit Pension Transfer Warning
Transferring away from a defined benefit pension scheme means you will lose valuable guarantees.
Taking benefits early will almost certainly reduce your pension income in retirement and is only suitable for a limited number of people and circumstances. This should not be seen as an easy option for raising cash.
If you release all your money from your pension early you will not have anything left to provide you with income in retirement.
When releasing cash from your pension, usually up to 25% is tax free, the balance is taxed at your marginal rate at the time and could change in the future.
Watch the FCA video explaining the expectations of financial advisers when advising you on defined benefit pension transfers.
Grove Pension Solutions Ltd is authorised and regulated by the Financial Conduct Authority (Reference number 465051).