Financial planners have been urged to thoroughly review how they conduct defined benefit transfer advice.
A panel of experts at the Money Money Interactive conference in Harrogate this morning said that, in light of recent FCA action in the area, it was clear advisers would hold the liability if advice is judged to have been unsuitable.
Head of pensions and long term savings at law firm Pinsent Masons Carolyn Saunders says “the buck stops with advisers” when it comes to DB transfers.
She adds: “I certainly don’t see any policy of Government appetite to restrict transfer activity.”
Red Circle Financial Planning director Darren Cooke questioned the motives of large providers now entering the DB transfer space through either executing advice or offering advisers transfer value analysis services.
Cooke says: “There’s a reason the insurance companies are out there. They deny it, they say they are just trying to help IFAs cope with demand. Rubbish. They’re after the money. They’re after the funds under management. They’re after the AMC.
“If there’s another pension mis-selling scandal in five years’ time they aren’t the guys paying the bill this time. You are. It’s your responsibility as an adviser to get it right. It’s your PI. It’s your company reserves that will go. It’s you that will be out of a job and out of the industry. It’s you who will be paying the FSCS bill.”
Nigel Chambers, director at pension specialists CTC Software, said that while the FCA still held the belief that transferring would be inappropriate for the majority of clients, an increasing number now had a compelling case for transfer.
He said: “When the FCA wrote that they probably thought the majority was 70 to 80 percent. I’d say it’s now more like 52 per cent, or 50 plus one.”