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FSA: Referring clients to pension transfer specialists will not damage independence

The FSA says advisers will not compromise their independent status if they refer clients to third parties for advice on pension transfers, opt-outs and long-term care insurance contracts post-RDR.

The regulator’s final guidance on independent and restricted advice, published today, clarifies a firm will not need to have permission to advise on the three areas in order to remain independent.

On pension transfers and opt-outs, the FSA says: “If a firm does not have permission to provide advice on pension transfers and pension opt-outs, it can still hold itself out as giving independent advice.

“This is because such a firm will not be constrained in its ability to provide advice on all types of retail investment products, as the definition of a retail investment product does not include occupational pension schemes.

“Although Cobs 19.1G says that a firm should start by assuming a transfer or opt-out is not suitable, all competent retail investment advisers who give independent advice should be able to identify clients for whom a pension transfer or opt-out should be considered, and be in a position to refer clients to a third party if their firm does not have the appropriate permission or access to a pension transfer specialist.”

On long-term care products, the FSA says: “We do not expect a firm that holds itself out as providing independent advice to have an adviser who is qualified to advise on long-term care insurance contracts, because it is a niche market for which we currently require additional qualifications.

“But, as with pension transfers, all competent retail investment advisers who give independent advice should be able to identify clients for whom a long-term care insurance contract should be considered and be in a position to refer these clients on to someone who can provide advice on these products.”


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. In this day and age we all need help in deciphering what is best for us.
    Over the past 25 years, most things in this world, like computers and cars and cell phones have improved dramatically. The same is true for long-term care insurance.
    Comparing long-term care policies from 20 years ago to today’s policies is kind of like trying to compare the Radio Shack TRS-80 to a MacBook or an iPad.
    For example, there are now two types of long-term care policies that can never have a rate increase. Here’s a brief explanation of them:

  2. man on the moon 10th June 2012 at 2:32 pm

    So no real change then.

    Competant, licensed and PI covered Advisors will still give advice. Ok.

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