fbpx

Summary

DB Pension Transfer Process at Cameron James for Non-UK Residents

At Cameron James, we find many clients take DB transfer seriously. This certainly makes us excited to help them.

One of our client who lives in France once came to us to inquire about the transfer process for the UK DB pension at Cameron James. We explained everything he needed to know to understand better the mechanism put in place by the FCA and the role of UK-based independent consultants specialized in DB pension transfers such as PAS.

After some explanation, this client also had a better understanding of the role of Novia Global as an IT tool provider and Novia Financial as trustee of the International SIPP, also the risks and benefits of transferring a DB “gold-plated” scheme into an International SIPP or QROPS.

To get further understanding, our client chose to do his homework first. This includes defining financial goals in retirement, estimating his expenses, identifying all sources of income in retirement (e.g., French & UK state pensions, French company pension, possible consultancy assignments that he could get, etc.), saving pots that he has in France (Assurances Vie, Schneider Electric shares), etc.

Therefore, he needed an estimated cost of setting up and running an International SIPP to include it in his DIY cash flow model.

How DB Pension Transfer is Done at Cameron James for Non-UK Residents

There are several stages involved in the DB pension transfer process at Cameron James. First, the DB Transfer is done under a “Two-Adviser Model.” Second, since the client we are talking about is a non-UK Resident, he required EU Regulated Transfer Advice (which a UK FCA DB Pension Transfer Specialist does not have).

In this scenario, PAS can run the DB Report and advise him on whether or not to transfer. However, PAS can not actually facilitate the transfer itself. They need a correctly regulated financial adviser with permissions in the jurisdiction of where the client is located. PAS does the report. Then, we take over from there, and the advice all goes through our EU licence.

The liability for the advice is therefore shared between PAS and ourselves. PAS effectively takes on the responsibility of whether moving from the scheme was the right advice. However, we take on the ongoing commitment of ensuring that the funds are invested as per the initial advice and remain suitable for the client.

So, those are all considerations you need to take on board, as does the Pension Transfer Specialist when they do their report. But, the primary concern is really whether you foresee having a guaranteed payment coming into your bank account each month from Age 65 as really necessary, and whether having the flexibility to invest it into equity markets, be able to have more control of when and how much of the money you access, and then being able to pass it on 100% to your beneficiaries is of more significant benefit.

With CETV’s being so high at the moment, the investment growth required to mimic the DB Scheme benefits via an annuity at age 65 (known as the critical yield) isn’t exceptionally high.

It is also essential to know that DB Report writers advise most clients not to transfer unless they have significant other assets. The annuity is just going to be heavily taxed and then stuck in a bank account each month because the client has more than enough funds from other sources to meet their income needs in retirement.

Cameron James' Fees Explained

At Cameron James, we don’t use any funds with initial fees. Instead, 80% of our portfolios are low-cost index funds (iShares and Vanguard), with 20% low-cost Active funds like Baillie Gifford. Our Ongoing fees are all taken directly from the SIPP itself, and there are no other charges provided to Cameron James.

The Initial DB Report fee is the only fee clients have to pay if they decide to start the advice process. So, the costs for Cameron James are only owed when clients choose to do the transfer.

Furthermore, as part of our initial advice process, another key to note is that we put together a Pre-Advice Confirmation, a type of unofficial suitability report that highlights all the regulations, options, and SIPP providers, investment portfolio, fees etc. The report is provided before clients even sign up to get the initial DB Report, so they have a complete, transparent snapshot of the whole process and what would happen if they are advised to transfer and wish to proceed.

Why Cameron James?

Cameron James is not a Discretionary Fund Manager (DFM). All of our investment advice and portfolio management must be approved first by the client. We do not refer to white labels or use any internal Cameron James products of ‘model portfolios’. We buy funds at cost price and pass them onto our clients without entry fees, loading fees, or exit penalties. 

At Cameron James, we are only reimbursed from our clients, which removes any bias or conflict of interest when selecting our partners like PAS, Novia, and your underlying funds. The likes of Baillie Gifford and Scottish Mortgage are typically for active and iShares, Vanguard, and BlackRock for passive.

Our only form of remuneration comes from our clients, and our fees are only deducted once the job is done and your portfolio has arrived at your SIPP. No advice is paid in advance, and you also have the option for us to pay your FCA DB fee and for it to be deducted from your eventual transfer value should you wish. This is the most tax-efficient option and is popular with clients.

Our Main Objective

The main objective at Cameron James is long-term client relationships and referrals. If we can double our clients’ portfolio over ten years, we believe our clients will not leave us and will likely refer to us. Referrals makeup 35% of our new business and are the most valuable source of new clients we can have. In addition, it is far lower cost to look after our clients than it is to pay for Google Ads.

Clients often say double sounds like wishful thinking, but we benchmark ourselves against the global markets, and the S&P 500 returns are more than 10% per year over the past ten years (CV19 included) and 10% per year over the long term (including 2001 and 2008). Obviously, for more conservative clients, this may not be possible. However, most DB holders with £1-2M in UK pensions can afford to invest for long-term equity growth.

All in all, if you want to discuss another case related to DB transfer and Cameron James as a firm, choose a convenient date below and begin speaking with our regulated independent financial experts to address all of your pension transfer inquiries.

Related Articles

Brite Advisors USA - PSG SIPP Limited Terms of Business Termination - What you need to know...

Book Your Free Consultation

Option 1. Book a day and time in our Online Calendar.

Option 2. Leave your details and we'll be in touch within 12hrs.

    Reach Us