Pension Transfer Specialist

Taking advice on a defined benefit scheme is both important and mandatory if the scheme is valued at over £30,000. It’s important because schemes can be highly complex and consist of many different elements, which make up the benefit.

Often, a scheme is accumulated over a number of years and has ‘sections’ of benefits that are treated differently in accumulation and payment. These sections can accumulate at totally different inflationary rates, some at CPI, some at RPI, some capped, some uncapped, and some are event adjusted on a fixed annual basis such as GMP.

This complexity often makes it hard to understand what benefits someone has and are entitled to.

The aim of professional financial advice through a pension transfer specialist aims to help translate these often overwhelming pension statements into a more digestible medium.

When taking financial advice, there are several steps to the process.

Initial engagement:

This is where you would find a Pension Transfer Specialist. These are advisers who have special permissions, over and above that of a standard financial adviser. They have both the qualification and permission to provide advice in this area. You should also seek a Pension Transfer Specialist with experience as some advisers only do one or two of these types of transfers in a year and may be out of touch with best practices.

Triage:

This is where you would speak to a Pension Transfer Specialist, and they would educate you on the merits and disadvantages of your current scheme. A final salary/defined benefit/GMP pension is often referred to as one with safeguarded benefits. This is because they have some form of guarantee to their income. Triage aims to help you understand these guarantees so that you can decide whether to proceed with pension transfer advice. Triage isn’t a form of advice, and you won’t discuss your personal situation with the adviser. It’s aimed to be a sense check, so the adviser is clear you understand your scheme and the repercussions of transferring it. Triage should be a free service. You won’t get any report or recommendation at the end.

Abridged Advice:

If you decide to go down the advice route and want to commit a pension transfer specialist to look at your case, abridged advice is a relatively new stage in the process. It aims to provide a less time-consuming check on your situation and provide an outcome that ultimately might save you time and money. However, if you have your heart set on a transfer and go through the full advice process only to get a recommendation to stay in your scheme, you will also have an advice fee to pay. This can often leave a sour taste in your mouth as you’re paying for something you’re not getting (a transfer). Abridged advice is designed to give you an idea of how a file assessment might go but for less cost (sometimes free).

The outcome of an assessment in the abridged advice stage is either:

• Not to transfer, or
• Full advice is needed to assess if a transfer is suitable.

In the case of advice not to transfer, a personal recommendation will detail the reasons why. This saves the client from going through full advice (and paying the full advice fee) to get the same result. It can often be evident from a few facts about a client’s situation that a transfer wouldn’t be suitable. Abridged advice uses these red flags to decline the case at the first possible point.

The other outcome from abridged advice is to tell the client it is unclear whether advice to transfer is suitable or not. This is based on the facts provided up to this point, and the only way to give a definitive recommendation is to gather further, more in-depth information through the full advice process.

Abridge advice is an optional service a Pension Transfer Specialist may offer; they don’t need to offer this service, so you should always check before proceeding.

Full advice:

This is both a lengthy and time-consuming process but absolutely essential to providing advice on pensions with safeguarded benefits. Full advice will entail a full investigation into the clients financial and personal circumstances. This will cover:

• Income/outgoings both pre and post-retirement.
• Assets and liabilities. ISA, other pensions, cash, National Savings, Investment Property etc. Liabilities need to be accurate regarding the amount outstanding, term left on loan/mortgage and the interest rate payable.
• Objectives – why do you want flexibility, if it’s for a large purchase, how much is this, and when do you expect to buy it. If gifting money to children, how much and when.
• Other Pension – How many other pensions are there? Where are they, and what is their value. If you have an existing workplace pension, can it accept a defined benefit transfer in? A workplace pension will often be a scheme with subsidised charges and might be a good option to transfer your scheme into.
• Are you married/divorced/ have dependents
• Do you have any investment experience? How long has this been for, and what did you invest in shares/funds/property etc

The above is just some of the information you would need to supply to a Pension Transfer Specialist to help assess the suitability of a transfer.

Outside of you providing information, the Pension Transfer Specialist would need to fully understand the scheme(s) you are looking to transfer. This is done by giving the adviser permission to speak to your scheme on your behalf. They can then ask all the necessary questions and complete analysis through the Transfer Value Comparator (TVC) analysis report.

The client attitude to investment risk is also assessed, often through a multi-choice questionnaire. This is to determine the level of risk a portfolio should be if the advice were to transfer.

At the end of the process, the client will be asked to complete a number of questions in their own words to understand if they’ve understood the advice, the implications of transferring in terms of loss of guarantees and their ability to accept investment risk.

As a pension transfer specialist, I offer tailored advice to those looking for guidance on their defined-benefit pensions. Whether you’re searching for a defined benefit advisor near me or seeking the expertise of my pensions expert, I’m here to help you navigate the complexities of the pension transfer process. In addition to providing advice on pension transfers, I will take into account tax credits, welfare benefits, and universal credit, ensuring that you have a comprehensive understanding of your financial options.