"Wealth is not his that has it, but his that enjoys it"
"Wealth consists not in having great possessions, but in having few wants"
"Time is the most valuable thing a man can spend"
- Laertius Diogenes
"The glow of one warm thought is to be worth than money."
"I don't care too much for money for money can't buy me love"
- The Beatles
"Simple, genuine goodness is the best capital to found the business of this life upon. It lasts when fame and money fail, and it is the only riches we can take out this world with us."
-Louisa May Alcott, Little Men
"And though I have the gift of prophecy, and understand all mysteries, and all knowledge, and though I have all faith, so that I could remove mountains, and have not charity, I am nothing."
"Not he who has much is rich but he who gives much"
"Life is what happens to you while you are busy making other plans"
"I pity that man who wants a coat so cheap that the man or woman who produces the cloth shall starve in the process"
Receiving advice on defined benefit transfers
The Defined Benefit Transfer Advice Process
The FCA changed the requirements for providing Defined Benefit Transfer advice with effect from 1st October 2020 and we fully support those changes which we believe were long overdue.
The key changes are:
- The introduction of ‘abridged advice’ which is given prior to ‘full advice’
- The abolition of ‘contingent charging’ where the adviser only gets paid if the transfer takes place.
- The introduction of a Personal Charging Document stating the charges for advice whether the transfer takes place or not
- The requirement to consider a transfer to a Workplace pension
- The introduction of ‘Carve Outs’ for people in financial difficulty or serious ill health where contingent charging might possibly still be used.
The aim of abridged advice is to assess who might be suitable to get full advice and it acts as an interim measure before full advice takes place.
This enables us either to advise the client not to transfer or not to convert their pension OR that it is unclear whether they would benefit from a pension transfer or conversion based on the information collected via the abridged advice process.
In order to provide abridged advice, we must obtain a full understanding and full details of a client’s circumstances (a detailed Fact Find), complete a risk profiling assessment, and examine the final salary scheme benefits.
The FCA quite correctly believes that in order to assess whether a DB transfer is suitable you need an in depth understanding of your circumstances and attitudes. We gather together your information by you completing your information using your online account called The Personal Finance Portal which we provide to you. This system enables you to list comprehensive information about you and your financial circumstances. It gives details about your family, your expenditure, your needs, plans, and retirement goals. It provides details of what other assets you have to meet those goals. It assesses your financial risks including completion of an investment risk profile.
You are also encouraged to register and complete your Life Goals which will help you to clarify what is important to you.
In this stage we do not consider a receiving scheme or conduct a transfer value comparator report.
We consider the risks of staying in the scheme and the risks of transferring and losing benefits.
Before proceeding with abridged advice, we issue the client with a Personal Charging Document (a personalised letter of engagement) which states in monetary terms the amounts the client would pay for abridged and full advice and subsequent ongoing advice.
If the client wants to continue to full advice the fees must be provided again with full information regarding costs in writing before they proceed.
It must be clear that this fee will be payable if a transfer proceeds or if a transfer does not proceed.
If a fee is charged for Abridged Advice and the client subsequently moves to full advice the abridged fee is offset against the full advice fee so that the client does not pay twice.
While the actual fee for Abridged Advice depends on the client circumstances a typical fee might be in the range of £750 to £1750 for the first defined benefit scheme with a reduced fee for second and additional schemes. The fees for full advice are laid out when we discuss the full advice process below.
If the report from the abridged advice stage concludes that it is not in the client’s best interest to transfer, we will proceed no further, however if it is unclear will ask the client if they wish to proceed to Full Advice.
If you cannot determine whether you should keep your DB scheme after completing the Abridged Advice stage, you can ask us to undertake a comprehensive analysis of the benefits of your DB scheme and a DC scheme that might be suitable for your needs. As part of this analysis we always include the possibility of a transfer to your current workplace pension if you have one, and this workplace pension could be a DB or a DC scheme. We will usually include the possible purchase of annuity, though this is unlikely to be a sensible option for most clients.
Our analysis will include cashflow modelling of possible financial outcomes allowing for all of your assets, liabilities, incomes, and expenditures. We will also consider if there are ways of meeting your objectives without giving up your DB scheme.
The Full Advice stage contains three elements which must be completed before we can consider whether a transfer is the correct route to take.
- Transfer Value Comparator (TVC)
- Appropriate Pension Transfer Analysis (APTA)
- Workplace pension comparison
Transfer Value Comparator (TVC)
The TVC is a calculation, a number, which is extremely prescribed with a lot of assumptions that are predetermined. The TVC aims to explain the value of the benefits to the client in the simplest terms possible.
In the past a TVAS (transfer value analysis) was prepared which focused on the critical yield (CY) but there were many flaws with this approach, so this was changed to a TVC. The TVC is now used as part of the process of understanding the true value of the benefits being giving up if a transfer is made. CY is no longer used as part of the assessment.
We have worked for over 20 years with O&M Pension Solutions who have many years’ experience and expertise in providing the required analysis so that we can assess your situation.
To obtain your Transfer Value Comparator Report from O&M you have to complete their three-page O&M questionnaire and authority and return it to us (do not send direct to O&M).
Some pension trustees insist on a ‘wet’ signature so please return it to us using our FREEPOST Address.
O&M charge £375+Vat - £450 including VAT for this report and we charge this fee direct to you without uplift. [This fee is discounted from the usual O&M fee of £520 +Vat - £624 because we pay them a monthly subscription and because of our long-term relationship with them. Please note that the O&M Report cancellation fee is £150 + Vat = £180
Please complete our IFP direct debit so that we can collect the O&M fee from your bank account.
You are often time restricted by the trustees of your existing DB pension scheme who usually only guarantee your transfer value for 3 months. In addition, they often take a long time in responding to the requests from O&M for information, so it is important to submit the case submission form to O&M as early in the process as possible.
Appropriate Pension Transfer Analysis (APTA)
The number crunching is only one side of the story and your decision will be based as much on your feelings, beliefs, ideas, attitudes, and experiences as on the numbers and we recommend that clients take some time with our questionnaire so that they can assess whether they are suitable to transfer their benefits.
Whether to transfer out of a defined benefits scheme
The APTA is where more ‘colour and detail’ is added to the Fact Find that was completed during the Abridged Advice stage. To quote from former Financial Conduct Authority (FCA) technical specialist, now a consultant Rory Percival:
“Advisers need to do to add more “colour and detail” about clients because the regulator is looking to be able to see a real person when they look at files, what they are trying to achieve, what their life is going to be like, and they want to be able to see that reflected in the fact find and in the suitability report. Does the suitability report sound believable?” Source.
We charge a percentage fee for the transfer and it is important to note that in line with the FCA regulations this fee is payable whether the transfer goes ahead or not. The FCA has banned contingent charging which meant that the adviser only got paid if the transfer went ahead because they believed that in some cases this created a bias in favour of transferring even if it was not in the client’s best interest to do so. The regulations now state that the fee is the same whether the transfer goes ahead or not with the result that this potential bias is removed.
We have opted for a percentage basis to reflect the fees and potential costs of the regulators, FCA, FOS, FSCS, and our Professional Indemnity insurers who all charge to a greater or lesser extent on the basis of the sums involved.
Our normal initial transfer fee is 3% for a transfer value of £250,000 (£7500) with a sliding scale for funds in excess of this amount. All clients are provided with a personalised fee statement which they are asked to sign before we proceed.
We have made a Fee projection chart that you can download and edit in Excel to see your own illustration by adding your transfer value.
In addition, we charge an annual fee of 1% of the funds invested (paid monthly at 0.083%) for ongoing work. We believe that it is essential for you to receive ongoing advice and in the rare situation of you declining ongoing advice we would ask you sign a disclaimer stating that we had no liability from the point of your discontinuance of ongoing advice.
We want to ensure that your decision to transfer your DB pension is right for you because if it is right for you then it is right for Interface Financial Planning and we can demonstrate to the FCA or anyone else that we have provided you with the right advice. Therefore, we make no apology for being thorough and ensuring that we follow the process comprehensively.
Our Criteria for processing Defined Benefit Transfer Cases
We believe that independent financial advice regarding defined benefit (final salary) pensions should be available to everyone.
However, after discussions with our compliance advisers and our professional indemnity insurers we now apply the following case acceptance criteria:
Workplace pension comparison
If you are currently a member of workplace pension, we will obtain full details and make a comparison of your previous DB scheme with your present scheme.
This may be especially important if your new employer provides a DB scheme and offers you a like for like transfer of benefits. We consider all properties of both schemes to assess whether you would be better off transferring to your new employer’s scheme, leaving your pension where it is, or a different alternative.
If your new employer scheme is a DC scheme, we give careful consideration to whether it would be better to move to your new employer’s scheme or transfer you own independent DC scheme.
If you choose to move your pension to your new employer’s scheme our fee will be based on the quoted transfer value.
The FCA has introduced a new category of client called carve outs where contingent charging is still an option that can be utilised for some clients to ensure that they are not excluded from getting advice due to it being unaffordable.
Carve Outs include people either in serious financial difficulty or serious ill health. Serious ill health on its own does not justify classifying a carve out in itself and it must also be proven that the client cannot afford advice on a non-contingent basis.
If a client is categorised as a carve out, then they are by default a vulnerable client and need to be handled as such.
FCA have provided guidance on how to assess whether a client can be categorised as a carve out, but it is the responsibility of the firm to decide that classification.
The FCA has introduced a new RMAR-M return to monitor the number of carve outs and to ensure that carve outs are not used to continue contingent charging when it is inappropriate to do so.
If we recommend that you do not transfer your DB scheme and you want to ignore that advice and still proceed you are deemed an insistent investor.
We retain the right to refuse to follow your instructions if the transfer is against our advice. However occasionally we may allow you to proceed providing that you follow our Insistent Client procedure and sign our disclaimer.
An additional fee might be charged to cover the additional administration and business risk.
What our Clients say
Alan has the ability to listen and care about people
We first met Alan in 1999; we both wished that we had known him many years before. Alan has several attributes, in addition to his financial skills, the ability to listen and caring about people. From the first day that we met our financial affairs became organised, now to the point where we can say that we never have any financial worries, in fact we seem to be better off financially now more than ever before. All due to Alan's guidance and expertise. We both consider Alan a very good friend, nice to know he would be there if we needed him.
Norman & Peggy Howell, Birmingham
I always receive a fast and efficient response
It has been almost ten years now since David and myself first consulted you for advice and guidance on financial matters, so I feel that it's time that I wrote to thank you for the help and assistance that has always been forthcoming. Shortly after we had moved house in 1992, you advised us to switch from one type of mortgage to another, which turned out to be the most successful financial move we had made in years. Over the years we contacted you for financial advice and guidance when our daughter was heading for University, on taking out life and house assurance policies and general financial overhauls. Your recommendations have always been sound and given in a manner both efficient and friendly, none more so than when I was widowed just over two years ago and needed a considerable amount of help, immediately given upon request and with great sensitivity during what was a very difficult time for me. There is little I can add, except to also thank the rest of your staff, friendly voices at the end of the telephone who take and pass on my enquiries and ensure that I always receive a fast and efficient response. I can recommend, without reservation, Interface Financial Planning Limited.
Maureen Pittaway, Sutton Coldfield
A very special and caring person
Alan - A very special and caring person, who it's been a pleasure to meet - thank you again it's been a privilege and honour, your kindness has been second to none and we know you've helped probably more than you should but I can assure you it was all very much appreciated, more than you know.
Bill & Sue Ralph, Oldbury, West Midlands
Advice that has been invaluable
Alan has been our financial adviser for 5 years. He is professional, well informed and reliable, and his advice has been invaluable to us. He and his staff are courteous and efficient, and we have no hesitation in approaching him for advice on any aspect of our finances, or in recommending him to relatives, friends and colleagues.
Tony & Sue Critchley, Lichfield
Always friendly and considerate
Alan Moran has acted on our behalf for over 10 years. Alan has over this time always listened to our requirements and fed back to us the best options, given our constraints and made very useful alternatives suggestions. He has always been friendly and considerate. I would not now consider making any financial investment or savings decision without first consulting him.
Ian & Joyce Miller, Birmingham
Honest and always takes the time to explain everything thoroughly
Alan has acted as our family Financial Adviser for many years. He is honest, non-pushy and always takes the time to explain everything thoroughly as often as needed. Alan is not only our Financial Adviser but we regard him as our friend. We would have no hesitation in recommending him and his staff to anyone who needs a Financial Adviser they can trust.
Malcolm & Sylvia Smith, Perry Barr, Birmingham
Alan's sound advice has improved my life no end.
I was introduced to Alan Moran in 1999. I was juggling my finances just to keep afloat and was wary of taking outside advice. A close friend of mine recommended Alan as a reliable and honest adviser who would take great care in choosing the right path to get my financial affairs on track. Trusting their judgement, I arranged to meet Alan. I was treated with the utmost care, given time to consider the guidance that Alan provided and never pushed into taking on financial services. Meeting Alan and acting upon his sound advice has improved my life no end. Even on a limited income, prudent planning has enabled me to save for annual holidays and even cope with the occasional unexpected expense as well as keep up to date with all of my bills. I count Alan among my friends and have recommended him to both my sister and my parents. He really is the genuine article and I cannot thank him enough for all he did for me.
Zena Davis, Coventry
Alan's knowledge of financial matters is very comprehensive
Alan was introduced to me by a friend at the time when my finances were a mess and I just didn't know what to do for the best. Calmly, kindly and sympathetically Alan sorted everything out. Since then he and his wonderful team have sorted out my house and car insurances, my son's mortgage and pension plan and, last but not least, guided me through the ramifications of buying a property in Spain. I have recommended him to friends, as his knowledge of financial matters is very comprehensive and sound. Alan is able to offer advice without making the recipient feel a complete idiot and he takes time to explain things thoroughly and in a way that is understandable.
Tricia Adams, Cannock, Staffordshire
Alan's sound advice has improved my life no end.
I have been a client of Alan Moran's for 12 years and during that time he has given me valuable advice on all aspects of finance. He always explains everything thoroughly and has been particularly supportive during periods of crisis in my life. He helped my late husband and I when his business went into liquidation and was even more valuable when my husband died, pointing me in the right direction with my finances and getting me to invest my money sensibly and with the just rewards that I am now experiencing. I regard Alan not only as my Financial Adviser, but also as my friend, and would, and in fact have, recommended Interface Financial Planning Services to anyone needing a Financial Adviser they can trust.
Marian Poolley, Sutton Coldfield
Efficient and reliable in terms of financial decision making
Alan Moran has been our independent financial adviser for a number of years. He has proven to be an efficient and reliable person to guide us in terms of financial decision making with regard to planning and management of current and future economic matters. He is friendly, discreet, careful and always courteous.
Chris & Tony Hampton, Halesowen
Highly professional, friendly and supportive approach
We have been clients of Alan Moran (Interface Financial Planning Ltd) for over five years. In this time, his highly professional, friendly and supportive approach has provided us with a thorough review of all aspects of our finances. We are now in a position where both our short term and long term financial planning is well organised and structured to suit our personal needs. We have recommended Alan and his team to many of our friends and know that they, like us, have been impressed and grateful for the care he has taken to provide such individual service.
Ann & Allan Rowlands, Handsworth Wood, Birmingham
Professional and friendly manner
Just dropping you a line to say thank you for all the help you've provided us throughout the purchase of our house and the investment policies you've recommended us. May we both thank you for the very professional and friendly way, in which you handled our business, and look forward to hearing from you in the future.
John Fletcher & Linda Davis, Bromsgrove
Wouldn't hesitate to recommend
We were recommended to Alan by my brother in law and have been very pleased with his advice and assistance. Since using his services, we have organised our Wills, Pensions and re-jigged our finances, and now would not consider making any financial investment or savings decision without first contacting him! We would have no hesitation in recommending his services to anyone requiring sound independent financial advice.
Richard Salaman & Emma Staples, Surrey
Valuable advice on our mortgage, future planning, savings and pension investments.
Seeking financial advice for the first time, I received details of three local IFAs. However, these cold statistics gave no idea of the actual person to whom I would need to entrust confidential information. Sometime later I came across an article in a local paper by Alan (Moran) in which the writer came over as friendly and trustworthy as well as being a qualified IFA. Having contacted Interface Financial Planning, the result has been a friendly relationship and valuable advice on our mortgage, future planning, savings and pension investments.
Mike & Gloria Nash, Great Barr, Birmingham
I have never had a single financial concern
The best thing financially that I ever did when I contacted Alan. I have never had a single financial concern and he has supported me through difficult times including the death of my dear wife.
Norman Howell, Birmingham
“Don’t put off the planning for your financial future as you are
never aware of what lies around the corner”
We first met Alan in 1999; we both wished that weIt was very important to gain financial advice in such a challenging time after my wife passed away. I needed to ensure that, as a newly single parent, I had got my finances sorted out and had also made provision for my children in case anything happened to me. As neither my wife or myself had made a will, Alan’s advice and guidance through this very difficult period was invaluable, especially dealing with the paperwork associated with this.
Paul from Birmingham
“Alan, was immediately empathetic, encouraging and, above all, practical and straightforward”
I realised that I had been operating both my general and particularly financial affairs reactively for far too long and it was time I behaved like a grown up. So I started to think about how I might achieve some sort of practical stasis. Alan, was immediately empathetic, encouraging a nd, above all, practical and straightforward. I hadn’t consciously taken financial advice before, but came to realise that the various salesmen who had sold me policies and pension upgrades were not motivated in the same way a ‘proper’ financial adviser was (or should be). Consequently, I had taken on commitments that weren’t necessarily in my best interests. Alan is genuinely interested in my circumstances, and owns a readiness to go beyond what I had imagined would be the boundaries of the role.