mjwalker007

Just to clarify the 5 year rule, the money isnt locked away for 5 years, the RRSP doesnt stipulate that, what happens is that when you open the RRSP, if you withdraw money within the first 5 years of you moving from the U.K , the RRSP provider is supposed to notify the U.K authorities who may then in turn tax you aswell as having witholding tax taken from by the Canadian authorities, this is not a situation you would particulary want to be in. Therefore it is in your interest to try and not touch the money for the first 5 years (if at all before retirement, lets not forget this money should be for your retirement, not to buy a car with !!!). However in reality would the RRSP provider keep track of this ????.

As mentioned i'm in the unique position where i gave advice on Pensions in the U.K and i am now transferring pensions to Canada.
Its very important to get the correct advice as this could save you money and time. I dont think there are particulary many advisors in Canada that have had experience of both (hence the queries on the forum)

Paul Wildy

While I dont have a problem with anyone that offers a service giving themselves a little bit of a plug on this forum in the hope of drumming up some business, I equally don't really see that much "advice" (which you presumably have to pay for?) is needed - you just need to open an RRSP in Canada that is on the QROPS approved list and then tell your pension plan in UK that you want to transfer out to an overseas scheme. There are a couple of forms to fill in (provided by the UK scheme operator) and then the Canadian RRSP fund gets sent the funds from your UK provider.

And of course you dont have to identify an RRSP that isn't locked-in if you never plan to touch the money but I personally always want to make sure I have as much flexibility in the future as possible - so choosing a regular RRSP over a locked-in equivalent seems a no-brainer to me.

Tangram

But don't you need to know that you would be better off in the new scheme than the old, with for argument's sake, the 25% tax free lump sum you can take from your UK pension, whereas you you would get taxed on it if you did the same from a RRSP ?

Not sure as it's a while since I dealt with pensions etc.

mjwalker007

Your quite right , I am giving myself a little plug, but on the other hand you only have to see that there has been 3 pages of questions about this topic and people DO want advice. As mentioned i have been fortunate to have advised in both countries and 95% of my clients are Ex Pats. When you move to a new country it is very daunting so being able to offer my clients advice and being from the U.K , they feel that there is a connection there straight away ! as myself and my family have also been through the same things that my clients have ! If i can earn a living and offer good advice to Ex Pats then it is a win - win situation.

Not everybody may be as experienced as yourself when it comes to financial matters and peolpe are looking for help and advice, If i can help great, and have commonality even better !

Also it is not as easy as you have just mentioned, one example is the UK scheme will generally not convert the money into dollars, this is something the receving scheme will have to do ! they will not just send you a cheque in the post ! Also as an advisor we have access to these RRSP schemes, its different in Canada, you generally just cant go onto the internet and purchase your own e.g ISA like you could in the U.K

Also as you have been to BMO to transfer your own pension, you must have felt advice was needed. This may be something you might like to try on your own for your next pension !

And finally, no I dont charge a fee for my clients , i get paid directly by my company, along the lines of BMO that you are so eager to recommend !! no difference really, i'm just recommending myself !!!

Paul Wildy

I'm not recomending BMO just so you know. They might turn out to be crap in which case I will just move the money to another provider. The only reason I mention them is that they were the only one I could find who would put the money into un unlocked RRSP - all the others wanted me to go the locked-in route. In fact I even opened an RRSP with another institution who said they would do it but they backed out at the last minute and told me they could only offer the locked-in route. So its not a recomendation and I wont get any commission for mentioning them!

And I didnt really get "advice" from them either - I simply had them open the RRSP account and receive the funds. I told them what I wanted the money invested in which was very similar to the fund that it was in originally in the UK.

Paul Wildy

In fact, and I dont mean to pick on you specifically - the problem with financial advisors is that they dont really provide advice at all. What they actually do is sell things. They sell people financial products but nobody likes the idea of being sold to so its dressed up as advice instead and buyers feel more comfortable with that. Its just like cars - sell them the product and get commission on the sale.

The reality is that most of the time the financial products are really not that great either. Financial advisors will normally want you to put money into some kind of mutual fund on which they get a healthy commission. But time and time again studies show that the vast majority of mutual funds underperform the stock market - investing in individual stocks without having the management overhead and upfront fees from a mutual fund is proven to produce better returns in the vast majority of cases.

Anyway, thats my take on it all.

505443

Thanks NSpaul and MJWalker for your input into these threads. Personally I feel more informed by both your comments and that is hopefully what any reader should take away from this, whether they seek advice from others or gather information and do things themselves. Personally I like to gather information, become informed and if I am still in need of advice then I may seek it. I'm glad I posted my questions onto this this forum.

Importantly thanks to both of you for the detail on the 5 year issue, as you say there is a risk involved there that this may be reported to UK, and we understand the consequences of that, whether or not Canada does any reporting of this at all. More importantly was finding out from NSPaul that BMO Nesbitt Burns is an institution that can handle an RSP that doesnt lock-in, having no control over my pension is something I've always resented from the UK. You've done the hard work finding who will not lock in the pension as the majority on the QROPS list will, and personally I'm very grateful I dont have to slog through all that. If any other readers can identify other RSPs that they have successfuly transferred to that dont lock-in on the QROPS list, then it will be great to see them published here for all to see, share this information among expats so we are not in the dark, I dont see them as advice/recommendations but straight up open information to digest - a list of which ones lock in and which dont. Perhaps MJWalker in his position can add to that list?

mjwalker007

Good comments, thats your opinion, but I can say I certainly dont agree with them.

I can only assume that in the past you have dealt with an advisor that may not of offered the advice or service that you felt was adequate. This may be true there are good advisors and bad advisors, but to tar everybody with the same brush and say I dont advise, I sell , is way wide of the mark.

It is comments like that that lead people into not taking advice and ending up in a lot worse position that they may have been.

I have done this job for over 15 years and I feel very passionately about the advice i give.

to quote one example of many, the family i advised to take critical illness on their mortgage ( they didnt know what it was and they wouldnt have taken it unless I had advised them on what it was and how it works !) The father was later dignosed with cancer. The mortgage was completely paid off, not any worries about getting back to work to be able to pay the mortgage payments, no financial stress for the family in a time when they would have been suffering enough. Try telling that family they didnt receive advice, and what would have happened if i hadnt given them advice.

That is just one example of many times i have seen how my advice has helped my clients and how it has impacted on their lives.

I see the personal side of the job,how it affects people in real life which is one of the main reasons i do this job, and why i feel passionately about it, and one of the main reasons i feel those type of comments are neither beneficial or helpful (not to me, to the public !) Believe me i am not selling cars !!

But I respect your views, even though I do not agree with them.......thats why we all have choice !!!


P.s

The reason people do not in the main invest in individual stocks, is the risk associated with investing in one company.This is a very high risk strategy as you are relying on one individual company and how that one company performs.

The reason people invest in mutual funds are that you are adding your money to millions of dollars of other peoples money, which can then be spread and invested in many,many different companies, therefore spreading the risk, and as you have mentioned the returns may be lower, for this very reason as managers are employed to decide where and what companies this money is invested in.

However this is a much better strategy than those people that invested purely in the Individual stocks of Enron ! I would say those people would have rather invested in Mutual Funds !

There you go ............some free advice !!!

The Drystone Cowboy

Does anyone have a timescale for how long the process should take ? I gave the RBC my UK pension details around 3 months ago and when I spoke to them last week the advisor told me that he was still waiting to hear back from the UK pension.

mjwalker007

It really depends on the scheme that is transferring the pension, but generally it can take anywhere between 3 to 6 months. Ask your advisor if he can contact the transferring scheme so he can chase up exactly where they are in the process.

Paul Wildy

Well, to be honest I didnt expect you to agree with my comments. How could you agree with them - you are trying to make a living after all.

But I still maintain that the business you are in is not one of providing advice but rather selling products. You see the difference is that someone who is in the advice business usually does just that - they provide advice and arm their client with the information they need to make a good decision. A lawyer provides advice. So too does an accountant. But a financial advisor simply "advises" someone to buy the product they are selling so how can it ever be impartial or solely in the client's best interest. You dont get paid for giving advice; you get paid for selling the products so your primary purpose is therefore to sell financial products.

If you are honestly telling me, to use the example of the family who you advised to take critical illness cover, that you looked at their circumstances and advised them that they needed this type of cover; educated them about the types of products that might be suitable and then that family went off to an insurance provider and bought coverage using your recommendations then I take back everything I said above. But my guess is that you didnt charge anything for the advice - you actually sold them an insurance product and got commission on the sale. Please tell me if this was not the case! As it turns out they did need it but that of course says nothing of whether the product was good value versus similar products they could have got elsewhere or by buying direct from the insurance provider.

And I did not say anyone should invest their pension in one stock! My free advice is this:

Go to a stockbroker. Have them put together a balanced portfolio of stocks (or if you have the know-how choose your own) and invest in stocks directly rather than a mutual fund. The interesting thing about the Enron example you quote is that it was the mutual funds that got burned much more badly with Enron than the individual investors. You see Mutual Funds have so much money invested in each stock that if the stock starts to look bad it takes them on average 6 months to sell their holding. To do it any quicker would crash the price - they are victims of themselves in a sense. By comparison your stockbroker would sell your shareholding in minutes.

If you honestly dont believe me about the inability for mutual funds to even match the performance of the market as a whole have a look at: http://www.fool.com/school/mutualfun...nce/record.htm or just search the web - there is a huge amount of evidence and research on the subject.

mjwalker007

Seems to be going around in circles, but to clarify the situation on the critical illness policy my clients took.

As i was an Independant Financial Advisor , I had access to EVERY critical illness policy on the market, Therefore I advised what companies critical illness policy to take based on the price of the premiums and the illness's it covered (not all companies offer the same premium or level of cover) etc etc. I did not work for a particular insurance company so i could offer my clients impartial advice and then advise them which policy to take. They did not need to search every company because that was my job, I did that for them, therefore I chose the policy that was best value for them based on the criteria above and compared with other policies on the market. I did not charge my clients a fee because i got paid directly from the particular insurance company that i placed their policy with, which would be very unethical to charge my clients a fee AND receive a fee from the insurance company. I also showed my clients that if they went directly to the insurance company that i had advised to take their policy with, the premium they would pay was EXACTLY the same. Therefore my clients got the benefit of being able to search the whole market, get the policy that suited their needs and budget,having myself complete all of the paperwork and liase directly with the insurance company to make sure their policy was being processed speedily,liasing with doctors etc etc, without it costing them a penny ! To me I think that sounds like a good service, and after 15 years in the business, I feel my clients agreed.

The accountant advises you on what taxes you pay and can save , thats his job.....I advise clients on Financial security, thats my job. We both do a job and provide a service. If you feel the accountant provides a service that is unique and the people could not do themselves , there are now many computer programs on the market that will allow you to do your own taxes. I did self assesment in the U.K, I didnt need to use an accountant, but there are many people that do because they do not want to do this for themselves, they want to see someone qualified who can advise them. There is exactly NO difference between the two comparisons ! The fact that people have the choice to take advice or do do this for themselves is exactly the way it should be.

I do not think everybody needs to see a Financial Advisor, that is there choice ! but there are many people that will, and many that will be very pleased with the advice and service that they receive.

As we have gone totally AWOL when it comes to the original thread and i'm sure people are getting slightly bored of this two person yo-yo ! I feel there isnt much more to say !

Paul Wildy

I really wouldnt worry too much about going off-topic - thats one of the main features of this forum. You are fairly new to this forum but those of us who have been on here a while have all seen many arguments and digressions - most much longer than the one above. As well as offering helpful information the forum is popular for its entertainment value too.

bazzz

But you still make more money if you can convince people to take out a policy, than if they didn't, right?

mjwalker007

If convincing somebody to take out something that will help to financially secure there family in the event of their death or illness, then i definately try and convince all of my clients,and i certainly do not apologise for that ! .

My clients can see any of the policies that i have for my family. I value my family (as anybody would) and i have made sure that if something happens to myself, my wife and my child will not have to struggle or worry financially(vice versa for me, if something happens to my wife). Unfortunately not everybody offers their family the same kind of financial security, because in general they do not get advice ! (common theme appearing here !) As mentioned , my clients can see any policies i have on my family (and some clients have asked to see them). I would not advise anybody to do something that I would not do myself !

Based on what you earn, how old your children are, when you want to retire, I show my clients how much life protection they need to replace an income in the event of death, so the family can continue with a decent standard of living. This figure isnt just plucked out of the air (johnny ball, think of a number !!) this is where planning comes in.

Ask this question ? based on your family situation, what would your partner need to continue with the same standard of living for your family, if they died tomorrow ! If you know and you have the right amount of cover great ! if you cant answer that question hand on heart, truthfully, then you may need advice.

As mentioned , I know my family are safe in the event of my death as i've planned for this, all I try and make sure is that other families can be in the same position as mine if something happens !