DB transfer complaints down since pension freedoms


The Financial Ombudsman Service has seen a significant fall in defined benefit transfer complaints since the introduction of the pension freedoms.

Experts say the trend is likely to reflect advisers’ cautious approach to DB transfers caused by concerns the advice may later be deemed unsuitable by regulators.

The FOS says it received an average of 20 complaints per month relating to DB transfers during the financial year 2014/15. However, since April that has fallen to an average of seven per month.

The FOS says the complaints it receives about DB transfers relate to advice given as far back as the 1980s.

Law firm Foot Anstey partner Alan Hughes says: “The number of complaints relating to old advice is bound to fall off as there will simply be fewer such cases around.

“Also, advisers may be shying away from giving DB transfer advice as it is perceived as high risk by the regulator and therefore professional indemnity insurers. So if less of such business is being transacted, the fall in complaints may be tracking that trend.”

In July Hargreaves Lansdown had to stop taking on DB transfers after being overwhelmed with demand for advice.

Head of pensions research Tom McPhail says: “We were experiencing very substantial demand, but we are now taking on relatively few DB transfer cases.

“Our advisory team is deliberately not taking on cases unless they think there is a decent chance of a positive recommendation, because we don’t want to waste people’s time and money.”