Advisers have expressed concern at Aviva’s potential entry into the DB transfer advice market, as a lack of capacity to provide advice and analysis reports continues to bite.
Aviva is considering “whether or not it makes sense” to offer DB transfer advice through its recently launched restricted arm in the wake of increased customer enquiries.
Last week a Freedom of Information Act request to The Pensions Regulator showed an estimated 80,000 transfers were made from DB pension schemes in the past year.
Aviva UK chief executive Andy Briggs says the provider has not yet decided whether it will start giving DB transfer advice but he emphasises this should compare how much money the customer could make by investing the lump sum with the income from the final salary scheme.
Prudential and Standard Life-owned national advice firm 1825 are among other providers offering DB transfer advice.
Facts and Figures Chartered Financial Planners managing director Simon Webster, who is qualified to advise on DB transfers, acknowledges a lack of capacity in the market but says he feels uncomfortable about providers giving DB transfer advice.
Webster says: “The concern as an IFA is, if providers are going to put resources into doing that for the market, will that drop the level of support they give to advisers who are moderately involved in the market but don’t have the full capacity to do it on their own?
“I am a little concerned about the message it sends to the rest of the market that they will start competing with the people who supply them with business.”
Meldon & Co IFA Mark Meldon is also authorised to advise on pension transfers and says he has completed around a dozen in the past three or four years out of approximately 30 approaches.
He says: “I don’t have a personal problem with Aviva entering the market because there is a shortage of people who are authorised to give DB transfer advice.
“We are seeing all of these large transfer values but they are not
really very large, they just represent fair value.”