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DB transfers: Two-thirds say drop unsuitable assumption

Money Marketing poll finds majority of advisers do not think starting point should be to assume unsuitability

Pension savings-2015Two-thirds of advisers say the profession should not assume defined benefit transfers are unsuitable.

In a consultation paper released last week, the FCA said it remained convinced that DB transfers would not be in the client’s interests in the majority of cases, but said that advisers should no longer have to assume that this would be the case.

Major advice firms including Hargreaves Lansdown have been operating on this assumption in line with the FCA’s guidance.

In a poll on the Money Marketing website of 150 readers, just a third said advisers’ starting point should be that a DB transfer would be inappropriate.

The remainder said they were in favour of a more neutral assumption over suitability.

Some figures in the industry had called on the FCA to drop the assumption of unsuitability, including CTC managing director Nigel Chambers and Aegon pensions head Steven Cameron.

In consulting on changing its assumptions, the FCA acknowledged that, since the pension freedoms, there could be compelling factors that mitigated in favour of a transfer.

However, while planning to withdraw the need for any preconceptions on the part of advisers, the FCA said this was not a “softening” of its position, and that “the onus is on the adviser to prove that a transfer is in a client’s best interests”.

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