FCA rules designed to make advice on defined benefit transfers more suitable for clients and reduce misselling will not work, says Henry Tapper.
At the Pension Debate in London today the First Actuarial director said the transfer value comparator tool introduced in October will not make claims against IFAs less likely.
This is because Tapper’s actuarial firm is finding the calculation to replace benefits for some young scheme members under the new regime has increased transfer values from £400,000 to £700,00 in some instances.
Such high values could increase the chance of misselling and help claims management companies launch actions against IFAs.
Tapper added the cost of compensation will be pushed onto the Financial Services Compensation Scheme with IFAs accounting for a greater share of the liabilities over the next few years.
He also said everyone is waking up to the challenge of managing DB transfers better as £36.8bn was transferred out of final salary schemes last year.
Furthermore the lessons of the British Steel Pension Scheme where many members were targeted by rogue advisers and introducers remain to be learned.
Tapper said: “The lesson of Port Talbot for trustees is they have to organise members around something when there is huge transfer exercise and that is social media.
“The justification for not putting in a transfer helpline in the context of BSPS was British Steel had no history of transfers. But there will be more situations like this in the future and we as actuaries need to reposition ourselves.
“Actuaries are probably the gatekeepers to trustees and actuaries can help the right IFAs meet the trustees. Port Talbot has changed our thinking but more should have changed in the past year.”