The DB transfer elephant in the room

The issue of defined benefit pension transfer advice continues to dominate the adviser news agenda.

It is the keynote topic at adviser conferences, it is lighting up online traffic on adviser websites and it is the go-to topic of conversation at industry meetings.

Money Marketing has been writing in-depth cover stories on the topic for the best part of the year, and highlighted the DB transfer market was reaching “fever pitch” as far as November. Before that, much coverage has been dedicated to the related issue of insistent clients. And we have been far from alone in reporting, highlighting and discussing the challenges of the pension transfer market that advisers face.

Follow the money: Where are advisers going wrong on DB transfers?

So this constant drip of the recent spate of firm suspensions over DB transfer advice, with little if any official acknowledgement from the FCA is at best disappointing.

At worst, it is frankly galling the regulator has made no explicit statement that it understands the extent of the issues at hand. It has hidden behind the jargon of a “multi-firm supervision exercise”, and ducked questions about the scope and scale of its pension transfer advice review. A little openness would not go amiss here.

But as much as I dislike the way supervision of the DB transfer market has been communicated, firms themselves clearly have questions to answer where there are found to be shortfalls in the transfer advice process.

Assessing suitability is hardly a new regulatory theme. It seems strange an end-to-end DB transfer process that considers the suitability of where funds are being transferred has somehow slipped through the net.

Natalie Holt is editor of Money Marketing – follow her on Twitter here



Richard Parkin: DB transfers aren’t black or white

I think we were all pleased to finally see the FCA’s consultation on defined benefit transfers. Even for those that don’t agree with all of the content, the time for revision of the current rules is long past. Even before pension freedom, the rules, many of which were formulated in the aftermath of the mis-selling […]


FCA rules out mandatory drawdown advice

The FCA has raised concerns about savers moving into drawdown without advice, but says that it is unlikely to make seeing an IFA compulsory as those with smaller pension pots could be better served by online tools than full face-to-face advice. The regulator has published interim findings from its retirement outcomes review which found the […]


Britain's “Forgotten Army”: The collapse in self-employed pension membership – and what to do about it

Pension scheme membership among employees has risen by more than five million in the past four years because of the policy of automatic enrolment into workplace pensions. But Britain’s army of 4.4 million self-employed people, who account for one in seven of the workforce, are not covered by automatic enrolment. Pension coverage among the self-employed […]


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

  1. As I have banged on about previously, pensions are effectively deferred pay. The currently high transfer values are distorting people’s perspectives and the insistent client rules are a joke.

    Think of the parallels, would an ethical surgeon carry out an operation just because the patient insisted? Someone would which is why there’s an industry in ‘no win no fee’ medical negligence claims. Tummy tucks and breast implants come to mind.

    It’s no different with DB transfers, a disaster waiting to happen in many cases especially for professional advisers who forget that caveat emptor doesn’t apply in our world.

  2. Agreed.

    However, shouldn’t the regulator be seen to be more proactive in shutting down the unregulated schemes being promoted by unscrupulous advisers.

    As per usual the stable door has been left swinging whilst the horse has bolted off with clients money.

    This regulator is unfit for purpose and needs to be brought under the auspices of a parliamentary committee that can apply common sense and sanctions where they deem it necessary.

    • “However, shouldn’t the regulator be seen to be more proactive in shutting down the unregulated schemes being promoted by unscrupulous advisers.” No. What part of “unregulated” is not clear?

      While the Government can’t shut down the schemes, they could stop them being flogged to consumers en masse simply by banning all cold calling to households for any reason and all selling of personal details to third parties, but they refuse to do so.

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