If you have a defined benefit pension entitlement then you need to be very careful before transferring out. These pensions provide a guaranteed level of income, spouse’s pension and inflation proofing that you will lose forever if you transfer to another style of pension fund.
Only an adviser who has undergone specific, high-quality, UK-based training and can demonstrate being awarded the CII Diploma in Financial Planning and either a G60 or an AF3 (Pension) qualification has the proven ability to make a complete analysis of your current scheme versus any potential new scheme.
We hold these qualifications.
Following the introduction of UK pension reforms in April 2015, if you wish to investigate whether to transfer out of your private sector defined benefit pension (and your value is greater than £30,000) you need to receive advice from a UK regulated financial adviser. This is not as simple as it may seem.
The UK based (FCA regulated financial) adviser needs to have the appropriate pension permissions to advise you and transact any transfer from a UK defined benefit pension scheme. This applies to you whatever age you are.
We need to be very clear here, we are not authorised to provide specific UK defined benefit advice. We are authorised by ASIC, the regulatory body for the country that you live in. This is incredibly important for you that we are.
Fortunately, we have connections with UK advice teams able to advise whether it will be in your best interests to transfer out of your defined benefit pension or not.
We do not offer a so-called “integrated” solution either, because of the obvious and clear conflict of interest.
We facilitate the required advice reports and then, if the advice is to transfer, do we become involved. It is not our position (ethically and legislatively) to have any influence on the initial advice report. This is why we ensure an arm’s length relationship with our UK based advice team.
Our key point of difference is that Simon spent the majority of his career as a Pension Transfer Specialist working in the City of London, and having the requisite qualifications that would enable him to write these reports himself (if we were still the UK) you can rest assured that the report we provide you has met the highest quality control audits.
“We insist our UK advice team make a specific recommendation whether or not it is in your interest to transfer. We do not see the value of only receiving a comparative report with no specific recommendations attached.”
This is incredibly important for you as without a recommendation you have no right of recourse to the UK Financial Conduct Authority (if things go wrong).
As one example, we recently met a client with three separate defined benefit schemes and the advice we organised was to transfer two of the schemes into a SIPP but leave the other as a defined benefit entitlement. This is a typical ratio for us, in terms of whether to transfer or not.
Our Service to You
In April 2015 the FCA ruled that in order to transfer out of a defined or safeguarded benefit fund you will need specific advice from a UK based financial advice firm with the appropriate permissions to deliver this advice. Harding Wealth Management has made the ethical decision to only engage with UK firms independent of us so the advice you receive is demonstrably not influenced by us in any way.
We believe that you should receive this advice before paying for our services. This is a business and ethical position we have taken to ensure fellow expats and returning Australians receive quality advice. Therefore, you will only pay for our services if the UK financial advice firm recommends a transfer out of your defined benefit scheme.
Our service includes:
- Liaising with the Trustees of your existing UK pension fund
- Gaining the Statement of Entitlement including the Cash Equivalent Transfer Value
- Completing a fact-finding meeting with you (physically or via Skype or telephone) to gain a better understanding of your financial position and desired outcomes
- When we understand the simplicity, or complexity, of your own personal circumstances we will calculate our fees which would only become payable if the advice was to transfer. This is designed to provide you with full and complete disclosures before engaging or feeling committed to the advice process.
- Developing an appropriate investment portfolio for you based on your own comfort levels and appetite for risk
- Organising and then presenting the analysis of the CETV and the advice document making a specific recommendation for your personal circumstances – fee to be paid to the UK advice team.
If the advice is to remain in your defined benefit scheme we will have completed our role and you have no obligations to us. Naturally, we would wish to be engaged for other areas of financial advice but this would only be if you also wish to.
If the advice is to transfer out of your defined benefit scheme then we would provide you with our advice document tailored to your needs and objectives and referencing the UK advice you have received.
We will then hold a meeting with you to explain the Statement of Advice and cover any questions you may have. Then, and only when you are completely comfortable with the entire solutions offered, will you engage our fee paying services. This service includes:
- Completion of all necessary documentation
- Liaison between UK trustees and providers
- Creation and Implementation of Investment portfolio
- Full implementation of new contracts
- Maintenance of HMRC compliance
- Regular Advice service and ongoing maintenance and reviews
Combined with the UK based team we provide an end to end service delivering high quality, fully regulated advice. The recommendation you will receive from the UK advisers is covered under the Financial Conduct Authority (FCA) and the advice from Harding Wealth Management is covered under Australian Securities and Investments Commission (ASIC).
The total package provided by Harding Wealth Management and the UK based Financial Advisory team delivers the sophisticated, quality advice that cross border advice demands.