Network Best Practice has taken greater control over appointed representatives working on pension transfers over fears they will not secure professional indemnity insurance, Money Marketing can reveal.
In addition, one of the biggest networks in the country confirms trustees from ceding schemes are questioning whether ARs have the correct permissions.
Last year the Treasury introduced a new regulated activity following a tightening of rules on pension transfers. But in September Money Marketing revealed a drafting error meant regulations had not been updated to allow ARs to perform pension transfers.
An FCA spokeswoman says “ambiguity” around the rules remains but the legislation is due to be amended.
However, Best Practice chief executive Ian Cooke says the network “can’t wait around any longer because the consumer is suffering”.
He says: “We wrote to the regulator. However, our issue is that, if you read the rules properly, ARs are not authorised.
“The problem is not with the FCA but with the PI insurers. That’s our biggest worry.
“Other networks have decided not to act but we don’t think you can have that stance when you’ve got that kind of liability hanging over you.
“We’ve created a transfer club where advisers can join under dual authorisation. So they are authorised directly under Best Practice and they remain authorised for normal ongoing service as an AR.”
The other network, which did not wish to be named, says it has not made any changes to procedure.
However, where trustees from ceding schemes have questioned the ability of ARs to conduct transfers, the network is using advisers who are CF30 authorised in another firm with the appropriate permissions to get around the issue.
Cooke adds Best Practice intends to keep the transfer club in place even once the AR rules have been amended.
He says: “Defined benefit transfers are incredibly high risk so being part of a group that goes the extra mile in checking cases and helping out has given another layer of protection. So there’s some good to come out of this.”