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.