Risk controls block Origen ETV business


Advisory firm Origen Financial Services has been forced to give up on lucrative pensions business because of the strict risks controls of parent Aegon, Money Marketing understands.

Origen had been working with corporate sponsors of defined benefit schemes on enhanced transfer value exercises, where members are offered a transfer value in exchange for giving up their guaranteed benefits.

A source says in addition to the fee earned from the corporate sponsor, the advice firm picked up new business worth at least £1m following one such exercise.

The source adds life company Aegon – which acquired Origen in 2005 – has imposed tight risk management standards which have forced it to stop bidding for ETV work.

Origen chief executive Rob Waller says: “Origen has taken the decision, like several other firms, to pause Enhanced Transfer Value advice, until the regulatory landscape is clearer.”

LEBC divisional director of group savings and investments Glynn Jones says ETV exercises are a “huge thing for us at the moment”.

He says: “There are three types of final salary de-risking that we do – the 55-plus flexible retirement options, pension increase exchange in retirement and ETV exercises pre-55. Each of those areas is really busy.

“We’re probably tendering for one a week at the moment, and winning a good share.”

Jones says activity had “disappeared” before the freedom and choice reforms were announced, but has come back in the last six to nine months.

Following pressure from former pensions minister Steve Webb, a cross industry body produced a voluntary code on conduct on ETVs in 2012, effectively outlawing the use of cash incentives.

Employee benefits firms say there is increasing appetite from employers to de-risk costly DB schemes before attempting to insure pension liabilities via bulk annuity purchases.

This week the FCA published final rules on pension transfers, confirming that pension transfer specialists must oversee transfers for pots worth £30,000 or more.

The regulator also says it will consider whether there is a need for a full review of transfer value analysis as part of a broader review of its handbook pension rules.