How to find an adviser to transfer your pension

Linda J. Dodson

First, free and impartial guidance is available from the Money & Pensions Service, an independent body, by calling 0800 011 3797. Switching from a defined benefit pension comes with greater responsibility and risk so it is important to understand the implications fully.

Savers who want to go ahead with a transfer must then find an adviser. Many have been exiting the market but there were still 1,965 firms offering pensions transfer advice in July, according to the Financial Conduct Authority, the City watchdog.

There are several websites you can use to find an adviser, including that of the Money & Pensions Service, which has an adviser directory. Another is Unbiased, which connects consumers to financial advisers; note that advisers have to pay to be featured on the site.

You must use an FCA-authorised firm, so check they are on the watchdog’s website. A key question to ask prospective advisers is whether they are independent or will only allow you to transfer your money into their in-house funds. The latter is not necessarily bad, but you must be sure you are getting value for money.

Some firms are independent so can offer the full range of available financial products and providers. Others are restricted so can only focus on a limited selection of investments or providers. An advice firm must tell you how much they charge for advice and you should always shop around as prices vary. 

Next, you need a “transfer value” from your scheme. This will tell you how much money you can get by pulling your money out of the defined benefit scheme. This value is guaranteed for three months and may change if recalculated so have a shortlist of advisers ready first.

You must then be prepared to share your current financial circumstances and aims, your priorities and spending plans in retirement, details about other pensions, assets and debts and information about you and your family’s health. The adviser may not be able to advise you if you are not clear on these points.

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