Defined Benefit (DB) pension transfer advice
A Defined Benefit (DB) or Final Salary (FS) pension scheme provides a source of secure, indexed-linked, lifetime income in retirement.
If your Cash Equivalent Transfer Value (CETV) is over £30,000, you are required under UK law to obtain UK regulated advice; indeed, the Trustees of the DB scheme can’t transfer any value of over £30,000 unless this has been signed off by a UK regulated financial adviser with the required specialisms.
Square Mile Asset Management has all the necessary specialisms and regulatory requirements to provide full transfer advice in this complex area. We can provide advice to UK and non-UK residents and have solutions for US tax resident members.
It is widely accepted that in most cases, it will remain in the best interests of the member to retain their DB pension scheme for the secure benefits it will provide them in retirement; indeed, this will always be our starting point.
Many financial advisors will rightly advise the member not to transfer should it be clear on contemporary evidence, that the transfer is not in their best interests. In many of these cases they will then decline to proceed with the transfer even if you wish to disregard this advice and transfer.
Should we recommend that you don’t transfer out of the DB pension scheme, we will allow you to proceed with the transfer as an ‘Insistent Client’ if this is done within the FCA’s guidelines.
An ‘insistent client’ is a client who:
- receives a personal recommendation from a FCA-regulated firm
- decides to enter into a transaction which is different from that recommended by the firm in the personal recommendation, and
- wishes the firm to facilitate that transaction
Therefore, we will not stop you from transferring your DB schemes if this is your preferred course of action, once you have been through our full advice process.
Several factors will influence a transfer decision, including personal circumstances, attitude to transfer and investment risk and the generosity of the cash transfer value offered by the Scheme.
We have outlined below some common reasons why members of DB pension schemes may choose to either remain or transfer out of the scheme.
Pension Transfer Gold Standard
Square Mile Asset Management has met the criteria to achieve the Pension Transfer Gold Standard set out by the Personal Finance Society (PFS). The Pension Transfer Gold Standard is a voluntary code of good practice for safeguarded and Defined Benefit (DB) pension transfer advice based around a set of principles. Firms are required to adopt and promote the principles, so consumers can better understand and find good advice and be confident they are dealing with a firm going beyond minimum requirements.
The Pension Transfer Gold Standard seeks to give Defined Benefit (DB) pension holders confidence when considering transferring out of a scheme. The nine core principles of the Pension Transfer Gold Standard are:
1. Helping clients understand when advice is appropriate
2. Ensuring advice given supports the clients’ overall wellbeing in the context of their stated objectives
3. Confirming client understanding and acceptance of all charges
4. Providing the most suitable and updated technical skills are applied
5. Transparent management of Conflicts of Interest
6. Helping clients understand the cost of transferring benefits
7. Avoiding unregulated investments and introducers
8. Transparency in advice processes and outcomes
9. Promoting the Consumer Guide to the Pension Transfer Gold Standard
Firms that adopt the Pension Transfer Gold Standard must:
- Have regulatory permissions for provisions or pension transfer advice. Therefore, we have demonstrated high levels of the financial and technical knowledge required to advise on pension transfers appropriately.
- Not currently be under any form of ongoing regulatory sanction by the regulator or accredited body in this field of advice. You can, therefore, rest assured that we operate to the highest standards.
- Have adopted all the principles of the Pension Transfer Gold Standard without exception. Accordingly, you can have confidence that we will uphold the above principles.
By working with a firm that has voluntarily committed to the Pension Transfer Gold Advice, you can be confident that you will receive the best possible advice, service and support when considering transferring out of a Defined Benefit (DB) pension scheme.
You can learn more about the Pension Transfer Gold Standard by reading their consumer guide here.