Dozzpot

I have seen a few threads about this by searching but not really found the answers I am looking for so...:

I have been speaking to a couple of companies about consolidating my UK ex-company pensions and moving them to a QROPS. They found me by trawling LinkedIn for Brits abroad and cold-calling. This was enough to put me on the back foot of course, but who knows - maybe they are offering something that would be to my advantage but I really do not know.

I do not really understand the reports I have been given; I don't get the critical yield, drawdown, uncrystallised funds and all the other jargon. I have tried getting input from other financial advisors in the hope that they will confirm or otherwise that what I am being told is a good idea but all they do is come back with a counter-offer for what they can do.

I do understand there are death benefits as if I croak, the funds are there in full as part of my estate but beyond that, all I can see are fees that add up to thousands of pounds a year with no explanation of whether I am better off just to leave things well alone.

I have found some websites that aren't bad but does anyone know where I can find an explanation in layman's terms about it all? Thanks.

Otto The Squid

If you have been sent recommendations by an adviser that you do not understand, then it is up to the adviser to explain them. A proper suitability letter will explain what a critical yield refers to, sustainability of income during drawdown and the difference between uncrystallised funds and drawdown. Did you pay for the recommendations or were they "Free"?

You refer to fees running into thousands? What was recommended? Clean funds on a low cost platform or an insurance wrapper with upfront commissions and mirror funds with a long lock in period ?

Any report should make it clear, based on assumptions given, whether you could be better off. If it is not clear, then why is a transfer being recommended in the first place?

Pulaski

The company that cold calls after trawling LinkedIn are a bunch of weasels, and a litigious bunch of weasels at that. If you try to post their name on BE it gets turned to *'s, but if you Google their name the are linked to a number of very unsavory reports and horror stories, mostly surrounding excessive fees and fear tactics over taxes on expat pensions and savings. By engaging an off-shore financial advisor you give up the protections you have under British law against excessive fees and high pressure selling, and moving the funds off-shore you give up the protections that pension funds have under UK law, in exchange for some highly suspect "benefits" of having off-shore funds - remember pension funds are already "tax free" in the UK.

If you have been contacted by them, and especially if you have responded, I recommend that you tell them not to contact you again and that you "will file a complaint with their Compliance Officer if they do." Those are the magic words.

For what it's worth, I would not recommend "consolidating" pensions just for convenience, it has no necessary benefits whereas having multiple pension savings pots has additional diversification value - in other words, a problem with one fund manager does wipe out all your pension savings.

Aviator

I had that, I told them to take a hike. Maybe they were short of recommendations from satisfied customers, who knows? If they have to resort to those tactics, not a firm I would want to deal with.

Dozzpot

Thanks all for the replies.
Otto - this has not cost me anything so far and the steep fees that I mention are how the percentage works out on the value of my pot.
I will draw a line under it all and make my own enquiries; only trouble is though it seems there is no such thing as an "independent" advisor in this area as at the end of it they all have something to sell.

mjwalker007

Recommendations really are a good way forward, as there will be people that have already gone through the process and are generally happy to tell you about their experiences whether it be good, bad or ugly.


I think contemplating using a company that cold calls .....especially a company that might be based in Dubai or the United Arab Emirates etc etc, is slightly risky. If its any consolation the company in question have called both of my best friends here in Canada, both of whom I have already helped transfer their pensions to Canada..........strangely enough I have not received a call from them myself yet

Otto The Squid

Which is why you need to find a fee based adviser to undertake the initial analysis. An adviser that offers a free analysis will only get paid if you move your pension.

Hurlabrick

I wouldn't touch anyone that made such a direct approach. You are unlikely to find a UK-based IFA (Independent Financial Adviser) that also knows enough about transferring to a QROPs approved Canadian scheme and the ins and outs of Canadian RSPs and RIF's to be able to advise you (I know my very reputable UK IFA can't help me on this and has said as much), let alone if you are talking about defined benefit / final salary UK pensions!

There are however a few ex-UK financial advisers that now live in Canada and work as financial advisers who seem to specialise in such UK to Canada pension transfers and advice etc. A simple search on this forum for QROP will show posts from such people. Alternatively a simple Google search. Your call.... After that, it is up to you who you trust, but at least you will have approached them.

Agree with Otto, a decent fee-based adviser will normally do an initial, high-level feasability study for free, then look to charge you on an agreed fee basis for any further work beyond that. There are a lot of things for an adviser to consider on both sides of the Atlantic.

Personally, I have already consolidated my UK personal pensions via an IFA into a single wrap and moved them into Flexible Drawdown, thus releasing my tax free lump sum (I can do this as I am over age 55). All of this in preparation for a QROP's transfer to a Canadian RRIF as and when (or indeed after) we move to Canada (planning on Summer 2017).

celticgrid

They are still leading their spiel with the fear factor. Received via LinkedIn today:

"By way of introduction I recently moved to live in the US primarily to advise fellow Brits, and others, who have UK pensions. There are material threats to UK pension values (including a UK pension tax on death of 45%) and benefit payment levels (eg many final salary pensions are underfunded)."

As for basic honestly, I note that "recently moved" is describing an event of almost 4 years ago. Barge-pole has been employed.

Pulaski

Good job, too. .... But I recommend threatening the nuclear option. NOBODY in financial services wants a complaint against them lodged with their compliance officer.

I was contacted several times before making that threat, but in the two years+ since, I haven't heard a squeak from them!

Dozzpot

I finally found an advisor that has told me I am better off leaving my defined benefit / final salary schemes well alone and putting them in a QROPS would not be the best thing to do if pension security is my priority, which it is.
He is actually from yet another company based in Dubai but with slightly more customer focus than the others I was talking to...

Pulaski

Good, I am glad to hear you got that advice. That has always been my understanding, so I wholeheartedly concur.

InVinoVeritas

I would just add a caveat that if your are resident in a low/no tax country then a QROPS might be useful to avoid being taxed at source.

Otto The Squid

It is not the ROPS that determines this but the DTA and confirmation which country has taxing rights. ROPS are continually missold on this issue. As well as many others.

InVinoVeritas

I would beg to differ.