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ABI guides on execution-only pension transfers

The ABI has issued its members guidance to ease their fears of stakeholder misselling allegations over execution-only pension transfers.

The issue surrounds regulations which force providers to accept transfers from all other pension arrangements. This is particularly a problem for transfers from defined-benefit occupational schemes as it is unli-kely to be in the member&#39s best interest to transfer into a money-purchase scheme.

But members may not be alerted to this hazard unless they pay for advice, leaving product providers fearing allegations of misselling or having to offer free advice.

The new guidance, which has been approved by the regulator, forecasts that execution-only transfers will be rare but where they do occur the provider needs to be satisfied the move is an unsolicited request which was not influenced by any advice by the life office or its sales literature.

The guidelines include a sample letter to an occupational scheme member requesting a transfer into a stakeholder, advising: “It is extremely unli-kely to be in your best interests to do this and we strongly recommend you take advice before you take any action.”

The letter supporting the guidance states: “It is important that as far as they are able, stakeholder pension providers protect customers from making inappropriate decisions.”

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