Legendary investor Warren Buffet’s well-known adage, ‘Price is what you pay, value is what you get’ – or even the famous firefighter Red Adair’s view that ‘if you think it’s expensive to hire a professional wait until you hire an amateur’ – certainly comes to mind when the subject of transferring out of a defined benefit (final salary) pension scheme crops up.
There are difficult decisions to make when it comes to transferring out a DB scheme.
Is it beneficial?
If I do go ahead where is the best place to invest the proceeds?
How do I draw upon my ‘pot’ of money in retirement?
You could be forgiven for falling into the ‘do I, don’t I, I’m not sure?!’ category!
It is a complex matter – and far too much for someone not steeped in pension knowledge to carry out on their own.
Indeed, anyone looking to transfer out of a defined benefit scheme needs to call upon the services of a company with three major things going for them:
1: pension specialist(s)
2: a knowledgeable financial planner
3: Professional Indemnity Insurance
Given the complexity and extent of work needed to bring about a smooth and successful DB transfer – allied with subsequent investment and the open-ended potential regulatory issues that can arise in such cases – then the customer or client has to be aware that it won’t be cheap.
And there is the potential for them to be advised to NOT transfer out of the DB scheme, yet a fee will still have to be paid for the work done. Some people might well baulk at that prospect, but just think, they may well have just been prevented from making a huge mistake that would affect them for 25, 30 years or more, and cost them a great deal of money.
Now surely, remembering Red Adair’s quote, that is worth paying for………
- Here at Lifetime we have a specialist pensions department that has over 150 years of combined experience in the pensions and financial services industry. Get in touch now, by telephoning 01226 208600 or emailing Tom Nelson at firstname.lastname@example.org