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Advisers reveal growing concern over pension transfers


Advisers are increasingly concerned about the rules around pension transfers as concerns persist over retrospective regulatory action.

Nearly one in three (27 per cent) of all calls and emails to adviser support firm SimplyBiz in July were enquiries to do with pension transfers, up from 19 per cent in the same period last year.

There were 1,465 calls and 1,430 emails over the month.

Information on HMRC limits and allowances was still the most popular reason for advisers to contact the firm, although this dropped from 34 per cent of all communications to 29 per cent.

Advisers have raised concerns over future regulatory action, particularly regarding pension transfers for so-called insistent clients. In June, the FCA published a factsheet on dealing with clients who ignore the recommendation of an adviser.

SimplyBiz pensions technical adviser Helen Shepherd says: “One of the biggest trends we’ve experienced over the past 12 months is a large shift away from defined benefits scheme membership into more flexible money purchase schemes, triggered by pension freedom.

“Understandably, we have seen a corresponding increase in requests for individual file checks by the pension technical team due to growing concern from advisers over the potential of future complaints.

“Despite the pension freedom legislation moving from theory to reality over the past year, there is still substantial confusion surrounding the raft of new legislation that has been introduced in a relatively short period.”

SimplyBiz data



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There are 12 comments at the moment, we would love to hear your opinion too.

  1. On one hand the government are giving consumers immense freedoms of choice to ‘invest their pension fund cash as they wish’, and in the other hand, the FCA are saying to consumers ‘no you can’t, and if you do we and the FOS will make advisers compensate you for your self inflicted losses’.
    Apart from that, I assume that the FCA has had to issue yet more ‘clarification on insistent clients’ as a tacit admission that in fact, the existing FCA rules are not at all clear. Then we have the FOS, who appear to be hell bent on siding with consumers, and choose to retrospectively apply their rules interpretations to fit their foregone and biased conclusions.

  2. The main reason Simply Biz are inundated with enquiries is down to the lack of leadership the FCA has shown , this has caused confusion within the adviser arena

  3. Mike: you are so right!

  4. Whatever happened to “Caveat emptor” which is I believe British law?

    • Which law are you thinking of? “Caveat emptor” isn’t a British law or even a Roman law, it’s just a phrase. The Consumer Rights Act and the Fraud Act inter alia make clear that the principle of caveat emptor has its limits.

    • Christopher Petrie 2nd September 2015 at 9:44 pm

      There is no “British law”. There is English law and Scottish law, reflecting the different legal systems of both countries. Wales is, technically, part of the United Kingdom of England (apologies to Welsh readers).

    • I think you will find as IFA”s we are bound by “Sods Law”

  5. The FCA at a meeting with a major compliance services provider stated to one of their senior compliance/policy team.. the government want to give people pension freedoms but we cant allow this to happen

    • Which is why MW was given the boot

      Don’t be mistaken (bit of topic I know) the up and coming “advice” review (RDR2 if you will) is all about George Osborne, putting boot to arse, and “not” in the right way I hasten to add, the FCA, will continue to have their powers (they may even get more) George will still get the fine money and we will still get to pay for it all !!

      Mark my words, the time is coming for the head boy to do his parade inspection, and guess who is going to get………. well lets just say hands on the wall sonny and bite down hard on your maths book !!

  6. Insistent clients keep being categorised/pigeon holed as those wishing to move protected benefits or leave a final salary scheme. The reality many of us are facing is those clients wishing to remove some or all of their tax free entitlement from a simple money purchase arrangement, in our experience often already paid up somewhere. The clients needs are usually very simple, Car Replacement, Home Improvements etc. none of these requirements are in their long term financial interests or being used for retirement. On the basis it is not in their long term interests, if we proceed to facilitate those clients wishes ‘against advice’, we are almost certainly going to be on the hook at some point in the future.

    We must all have genuine clients with genuine enquires needing help/advice but as this article would suggest, as advisers we are reluctant to get involved at the moment. We have a GPP member that wants a partial transfer out of his GPP to a flexible drawdown so that he can help his daughter get onto the housing ladder with a deposit for a house. He needs help setting that up, its not straight forward but we cannot “recommend” it as in “his” best interests. If we don’t help him, he will be straight onto his employer for whom we operate the GPP stating we are refusing to support him in his ‘time of need’.

    In two years time we will all be getting texts and phone calls saying “have you been treated as an insistent client at any point in the last two years? call this number now, your adviser was negligent in helping/allowing you do what you wanted to with your own money”.

    Trying asking your compliance department, compliance officer, PI insurer how they feel about “Non-Advised Drawdown”??

  7. The COBS rules are quite clear, a transfer cannot be recommended unless there is contemporary evidence that it is in the best interests of the client. What we are seeing is two different definitions of ” best interests” . The first is designed to protect the consumer against making ill informed financial decisions, the second is politically driven and has no consideration of the potential long term damage to the consumer.

    The problem we have is that we get the blame either way, too strict or too pliable. In my opinion the non advised or ” insistent” transfers have no place in the regulated world, and should be subject to Government warnings, just as were placed on cigarette packets. The Chancellor gets his money , we do not pay the compensation bill later.

  8. The whole matter has no logic at all, the treasury is headed up by the Chancellor as is the FCA, so the Chancellor has two heads or two faces.They wont take the blame for anything, so the answer is dont advise and tell the client why.

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