Case Study · When the obvious answer isn't the right one
You Get What You Pay For
A client compared three quotes for a pension transfer and nearly chose on price. Understanding why he thought he needed a transfer at all uncovered tax issues the other quotes never considered.
- The situation
- Comparing quotations from three advisers for an overseas pension transfer
- Key areas
- PensionsTax
- The outcome
- Significant tax issues identified before any transfer took place
The situation
A prospective client approached us wanting advice about transferring his pension overseas. Sensibly, he decided to approach three adviser firms and ask what each would charge.
Our fee was higher than the others, which naturally made him question what he would get for the extra cost. At first, he decided not to use us.
Where things became complicated
The brief
He had asked each adviser “I want to transfer my pension overseas, how much will you charge?” The other advisers answered that question and proposed a transfer.
Wider position
His pension was only one part of his overall financial position. His residence, future intentions and tax position all needed to be understood before deciding whether a transfer was right at all.
Tax exposure
Considering his circumstances as a whole uncovered tax issues the other advisers had not considered, issues that could have led to substantial and unnecessary tax charges and penalties.
The Montfort approach
01 Understand
Before discussing a transfer, we wanted to understand why the client believed he needed one.
02 Rebuild the brief
We looked at his circumstances as a whole, including his residence, future intentions and tax position, rather than pricing the transaction he had asked about.
03 Identify
This uncovered tax issues that had not been considered, and that could have led to substantial and unnecessary tax charges had he proceeded with the original, product-led advice.
The turning point
You get what you pay for.
One adviser was pricing a transaction. We were looking at the client, identifying the risks and working out what should actually be done. There is nothing wrong with comparing quotations, but they only mean something when every adviser is answering the same, properly built brief.
The outcome
By rebuilding the brief around the client rather than the transaction, significant tax issues were identified before any transfer took place. The cheapest way to complete a transaction can become very expensive if the transaction should never have happened.
What this case shows
01 Look at the whole picture
A pension transfer decision depends on residence, future plans and tax, not just the transfer itself.
02 A transaction isn't always a solution
The right question is not which product to use, but what the client is actually trying to achieve.
03 Timing matters
Issues identified before a transfer took place could have become expensive, unnecessary tax charges if the transfer had gone ahead first.
Understand your financial life
Montfort combines financial planning with education and coaching, so clients understand not just what to decide, but why. Being an informed client is often what makes the right decision possible in the first place.
Client names and certain identifying details have been changed to protect confidentiality. The circumstances and planning challenges described are based on real client experiences.
Related planning