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Advisers split over DB transfer insistent client rules


Advisers are split on whether or not they should be allowed to transact against their own recommendations.

The issue of so-called “insistent clients” has been thrust into the spotlight as the number of defined benefit pension transfer requests has increased since the pension freedoms.

Under the Government’s rules, those with more than £30,000 in safeguarded benefits must seek advice. However, there is no blanket rule against an adviser recommending not to transfer, but then facilitating the request anyway.

A poll on the Money Marketing website asked advisers if they thought they should be allowed to transact on behalf of insistent clients who want to take a course of action different from what has been advised.

56 per cent said yes, and 44 per cent said no.

While the FCA assumes DB transfers are not in the client’s best interests, the regulator released updated guidance in January saying that advisers can facilitate transactions for insistent.

However, it says they must make clear what advice is suitable, what the risks of the alternatives are, and that their actions will go against their recommendation.

The Personal Finance Society and a number of compliance companies have said that advisers should not be transacting against recommendations.

Some providers such as Hargreaves Lansdown will not process any DB transfer instructions that have come from insistent clients.

This morning, The Pensions Regulator released data estimating that 80,000 DB transfers had been conducted in the year to March 2017.



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There are 3 comments at the moment, we would love to hear your opinion too.

  1. At least two companies out there will not accept DB transfers unless the advice given was “positive”. In those cases the adviser cannot facilitate even if he wishes to unless he is prepared to tell the provider that the advice was to transfer. Would like to think that no adviser would do that.
    The rationale is that the providers -and there are probably more than two-might have problems if it is subsequently disclosed that they accepted a transfer without getting the adviser to confirm a positive outcome and could be dragged into a subsequent compensation claim.

  2. This is a little bit misleading as the question was whether advisers should be ALLOWED to transact against recommendation with no explicit reference to DB transfers. Clients won’t always agree totally and may prefer a slightly different approach to our recommendations. It’s up to advisers to decide whether to respect the client’s decision or turn him/her away. “Should advisers transact against DB transfer recommendations?” may have resulted in a completely different outcome, however.

    PS – is it just me or does this website shake now?

  3. Terry Mullender 25th May 2017 at 2:51 pm

    If a GP prescribed suitable medication for a patient with a badly bruised foot but the patient then “insisted” on receiving alternative medication would the GP then prescribe it?

    I think not…

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