In 2015, the government’s pension freedoms gave consumers with defined contribution (DC) pensions more flexibility in how and when they could access their savings. The government put in place a mandatory advice requirement to prevent members of defined benefit (DB) schemes from transferring against their own best interests. DB pensions are extremely valuable as they offer guaranteed, inflation-proofed lifetime income for members and their spouses which most consumers want in retirement. They also protect members from the longevity and investment risks to which members of DC schemes are exposed. However, significant numbers of DB scheme members have transferred to DC schemes.
Our Chartered financial planners are fully qualified pension transfer specialists, however, due to commercial reasons, we have decided to outsource this advice. This gold standard service is offered through Aviva, which is one of the strongest financial services brands in the UK.
Important notes on defined benefit transfer advice:
This is a restricted advice service which means that we can only offer advice on Aviva products and services.
Aviva has an investment proposition focused on strong analysis of customer needs, development of an attitude to risk and use of the competitive fund ranges. In taking responsibility for the full end to end DB advice process, Aviva maintains the responsibility, deciding the final investment decisions to ensure good customer outcomes in the short, medium and long term.
We do not accommodate insistent clients.
We do not accommodate cases where the client is under 53 years old.
We do not accommodate cases where the total CETV is under £100,000.
The CETV must have at least eight weeks’ validity remaining.
The advice and recommended investment strategy must remain in place to ensure suitability unless there is a material change in personal or financial circumstances.
There are three stages to the advice process:
Triage is offered through a series of short videos outlining the following:
- The pros and cons of each type of scheme
- A summary of the sorts of consumers who might typically benefit or not benefit from a transfer but without personalised references to the consumer’s own circumstances
- An explanation that the FCA believes most consumers are best advised to stay in a DB scheme.
Triage is provided free of charge.
This is a standard part of your DB advice journey. Following a review of your personal and financial circumstances, abridged advice helps avoid the cost of full advice, if it’s clear at an early stage that remaining in a DB scheme is the right recommendation.
The charge for the abridged advice service is £800 (plus £160 VAT) and includes the collection of data, analysis and generation of the abridged advice report. In the event that the outcome is to remain in a DB scheme, you will be charged the full amount. There is no additional charge for multiple schemes.
The full advice charge is made up of two elements: There is a flat report fee of £1,525 and in addition, there is an advice fee of up to 2% of the transfer value.
Full advice service (ex VAT)
|Value of CETV advised on
|Report Fee +
|Amount above £1M
The maximum Fee is £10,775 (plus VAT)
If a client receives an unclear recommendation at abridged advice stage and proceeds to full advice, the £800 (plus VAT) advice fee for abridged advice will be replaced by the full advice fee.
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