1. Tim Eadon Chartered Financial Planner Managing Partner

2. Defined Benefit Transfers - Threat or Opportunity?
The new pension freedoms have opened a new world of choice of opportunity with the ability for everybody to access their pension fund as and when they want to………………
Unless of course it is a Defined Benefit transfer
Our regulator states that we:
“should approach all DB transfers from the standpoint that the transfer is not in our clients best interests”
But is this the right message post freedoms?

3. FCA Guidance for DB Transfers
Still governed by legacy regulation – Critical Yield Led
DB transfers should only be considered for those clients who are either Sick or Single
But this doesn’t take account of any desire for flexibility or superior estate planning opportunities with a DC scheme
FCA issued a policy statement on “Proposed Changes to Pension Transfer Rules”
But what happens until then?

4. What do Pension Freedoms bring?
Superior death benefits
No tax payable up to age 75
Unlimited Beneficiaries/Estate Planning
No more “capped drawdown”
The ability to utilise the pension fund I whatever shape that suits
Can finally plan for the “J” curve
Access to a significant tax free lump sum from age 55
Now an essential part of later late financial planning.
Pay off loans & other debts
Provide the ability to stagger retirement like never before
Retirement dates are a thing of the past
Control & Flexibility like never before

5. However the risks are not for the faint hearted
The benefits of transferring from DB to DC are undeniable but the risks haven’t changed
The transference of investment risk from scheme to an individual in a world of low interest & high volatility
Sequence of Returns Risk
Running out of money could lead to future claims
Having easy access and control over large sums of money can be extremely detrimental for many individuals
Unlimited liability - out advice will be tested against rules that haven’t been written yet!

6. What choices do Advisers have now?
Do it Yourself
Depends upon your level of qualification
If qualified - desire to continue in this field of advice
2. Outsource the transfer advice
Using a Pension Transfer Specialist
Don’t do anything
Leave the clients in your filing cabinets
Other Advisers will offer the service if you dont

7. What do Independent Transfer Specialists do?
Provide a full evaluation of any DB scheme using a TVAS, producing a detailed report and analysis
Create comprehensive report and recommendation for use by the Adviser & Client
The client can be handed back to the Adviser for them to deliver any investment advice
Take all the risk away from the Adviser
Deliver a reliable, compliant and professional service to support any Adviser proposition

8. Working with Advisers - Outsourcing
Option 1 – Transfer Advice Only
The Client is temporarily passed to the transfer specialist firm to evaluate the suitability of the transfer, they then invest the client’s money into the hosts firm chosen investment vehicle (usually in cash initially) with the client being passed back to introducing IFA’s for ongoing investment and tax advice.
Option 2 – Evaluation & Suitability Report
The Adviser hands the client details over to the pension transfer specialists for them to evaluate the case; produce a TVAS, Cashflow and robust suitability report. This is handed back to the Adviser to enable them to write the business under their brand, PI and regulatory framework

9. Any Questions?