The Independent Benefit Consultancy (IBC) is now in liquidation. Have you been a victim of their pension transfer advice?
Based at Baltic Chambers in Glasgow, the IBC are known to have transferred thousands of final salary pensions. You may have even been referred to them by your own financial adviser.
These types of pension schemes typically have incredible benefits and guarantees that are immediately lost if transferred elsewhere. These “hidden” benefits mean we regularly see substantial six figure losses. Pension holders are often completely unaware they have been victims.
Huge numbers have been moved from Local Government Pension Schemes (LGPS) like the Strathclyde Pension Fund, the Lothian Pension Fund, the Falkirk Council Pension Fund and the Dumfries and Galloway Pension Fund. Diageo and Pilkington Glass are just two of the many other defined benefit final salary schemes known to have seen high levels of transfer activity.
A massive percentage saw their pensions moved to PruFunds. Their Cautious fund was a particular favourite. The latter, renowned for it’s high fees, is designed to protect pension holders in the event the stock market suffers significant losses. Despite this the COVID pandemic saw as much as 20% knocked off the value of some pensions.
The ongoing advice fees charged by the IBC were also high at 0.75% or 1%, with promised annual reviews often not taking place.
So where did it all go wrong? Well in October 2020 the FCA, the UK’s financial regulator stripped the IBC of their final salary defined benefit pension transfer permissions. Other significant restrictions were also placed on the firm. Actions that are certainly not taken lightly. Read the full story here.
A Financial Ombudsman (FOS) decision against pension transfer advice given by the IBC was also published in June 2020. Read more here.
Beat the Banks is a CMC. You can claim for free, without using a CMC, first to your provider or to the FOS/FSCS/TPO. Click here for more information.
The downfall of the IBC.
100 million in funds under management
Especially since “pension freedom” in April 2015, the regulator has become increasingly concerned about the sheer volume of pension holders advised to leave these type of incredibly valuable schemes. Moving away is only for the select few who understand risk, have a capacity for loss and are seasoned investors. To help DB pension holders who were persuaded to move and might now be concerned about the advice they were given, the FCA have even gone as far as giving guidance on the tell-tale signs that a faulty transfer may have been recommended.
Back in October 2016 an up-beat Kenny Simpson, the sole director at that time, was happy to boast to City Wire about putting a winning team together at The Independent Benefit Consultancy, view it here.
In just 7 years the business had amassed £100 million in funds under management. Rapid growth had followed from “pension freedom” in April 2015. Not just that, the company at that time “worked with over 60 IFA partners.” Independent Financial Advisers who didn’t hold the necessary level G60 qualification and permissions to advise on the merits of transferring out of these highly valuable pensions with their huge inbuilt benefits and guarantees.
According to Simpson clients were directed to invest in the PruFund, a multi-asset mix of with-profits funds, with ongoing annual advice fees ranging from 0.5% to 1.50%. It’s hard to argue that a one size fits all approach may have have benefited every DB holder who was told to move. One thing is for absolute certain, with 10 year gilts rates now hovering close to zero, DB transfer CETV’s (Cash Equivalent Transfer Values) are likely to be significantly higher than as little as one year ago. Poor advice could therefore mean suffering substantial losses.
It’s all very much at odds with with a firm who heralded itself as “one of Scotland’s biggest IFA’s” and who according to Simpson, “volunteered” to give up it’s DB transfer permissions following an FCA review.
If you were given Defined Benefit pension transfer advice directly by the Independent BenefitConsultancy or indirectly through one of their considerable number of referral partners. Beat the Banks and our trusted partners are very happy to check the advice you were given entirely for free. If we believe you have a complaint then we will give you the options on how you can claim for valuable compensation. We would expect that among those given advice to move would include members of the Strathclyde Pension Scheme, Pilkington Glass and Diageo to name but a few.