Typically, when transferring your UK pension, your IFAs will ask you for all the information they require to conduct your review after your initial conversation. Your IFA will need a letter of authorization from you to gather all the necessary information before they can proceed with the advice process. This letter is known as a “Letter of Authority” (LOA).
A Letter of Authority is required for the IFA to access any relevant information concerning the pension pot. The LOA should include the member's credentials and other related specifics of the information required to complete the report. Each client who wishes to move ahead with the transfer process should have their LOA, signed and dated.
In a LOA, you grant the IFA permission to carry out specific tasks or exercise specific authority to carry out the principal obligations. In terms of pensions, the LOA is a brief document that includes information about you personally, including your name, address, date of birth, National Insurance number, and pension scheme information.
Your annual pension statements are typically included in the LOA, but this only gives you access to one crucial piece of information, particularly regarding your pension value, or CETV. Your IFAs also need some additional data to complete the report.
To make sure the IFA have all the required information, your advisor will ask your pension providers about the funds you have invested in, the status of your pension, a breakdown of charges, benefit and beneficiary information, CETV, accrual rate, commutation factors, your lump sum, and, in some circumstances, information about whether you are permitted to transfer your pension or not.
Our CEO and Independent Financial Advisor, Dominic James Murray, explains everything you need to understand surrounding the Pension Letter of Authority (LOA), in one of our YouTube videos below.
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Click here for more UK Pension Transfer videos!
Are You Tied by a Letter of Authority?
Most of our clients are unsure about signing the letter of authorization because they feel out of control when they do. A LOA just authorizes them to leave and get information from your pension scheme. To emphasize, signing a Letter of Authority does not indicate that you give your IFA authority to transfer your pension or that you consent to work with them. Generally, you will not have signed any paperwork that confirms you are working with them.
We sometimes joke with our clients about letters of authority, saying things like, ”Look, the only people who are taking any risks with the letter of authority are us as a company.” We are the company that pays our employees' bills, and you will never be bound to us simply because you signed the letter of authority.”
We always advise our clients not to be afraid of being bound just by signing the letter of authority. You can sign a letter of authority to one or more IFAs to check into any aspect of what is the most ideal decision for your UK Pension.
Cameron James, Expat Financial Planning: Your Trustworthy Pension Transfer Specialist
Cameron James Expat Financial Planning is the preferred independent financial adviser for final salary pension and SIPP transfers. With over ten years of experience transferring pensions, Cameron James is now servicing clients in 26 countries.
We have the qualifications and technical knowledge required to help you transfer to an international SIPP as an ex-pat and a US resident. Our mission is to bring regulated and transparent advice to our clients. As such, our clients know how much their advice will cost in advance, with no hidden fees.
Cameron James – Expat Financial Planning has a sophisticated cash flow management system in place. Our senior management team has a decade of expertise in serving ex-pats. It is committed to serving the requirements of expats for decades to come.
Transferring a DB or DC pension into a SIPP plan for ex-pats is not a simple decision. Before deciding, many details and procedures must be thoroughly understood. Without comprehension, the benefit will turn into a potential loss.
It is essential to seek competent advice from a qualified financial adviser to verify that your profile matches the suitable options and to ensure that your choice meets the UK and US regulations. Meet one of our dedicated advisers to get a comprehensive understanding of SIPPs. Book for a free initial consultation with one of our Independent Financial Advisers through the button below.
