View more on these topics

Rob Reid: Cover your backs on DB transfer advice delays

I was interested to read a Financial Ombudsman Service case lately, where a potential client approached a firm for pension transfer advice but the firm decided against advising them.

Unfortunately, a delay in the firm making that decision resulted in the cash equivalent transfer value timing out, meaning there was no time left for the subsequent adviser who did agree to provide advice.

The first advice firm should have declined without delay, that is for sure, but even if they had, I doubt there was enough time left anyway, especially if the information from the defined benefit scheme was insufficient. A 90-day turnaround is all very well if the CETV is emailed to the member on the date calculated and the member then forwards it to a chosen adviser straight away. But we all know that is not often the case.

Rob Reid: FCA cannot ignore its ‘too-difficult’ pile anymore

For starters, the CETV is 10 to 15 days old by the time the member receives it by post. They then may take up to 30 days to select an adviser, leaving us 50 per cent of the 90 days left for further information gathering and clarification delays. We may have as little as 10 days left to draft a report.

Ideally, people should find an adviser, then apply for the CETV, but that is not the norm.

In the case outlined here, the person’s CETV dropped. But what would have happened if the firm had gone ahead, only then to discover the CETV had gone higher? Would that have been a valid complaint?

A CETV is a snapshot in time; it is based on current assumptions. It is no different from getting a fund value on a defined contribution scheme. If we are to see more cases like this, then it is essential advisers clearly state something like the following on all DB transfer cases: “We have no way of predicting whether we can complete this case in 90 days. Therefore, you must be prepared to ask and pay for a new transfer value, which may or may not be more or less than the one you have at present.”

We find ourselves in a complaint culture, partly fuelled by the FOS’s ability to ignore common law.

There is no doubt that firms need to be careful how they advise in this area, and that extends to all aspects of DB activity, whether that be triage, the advice itself or declining to advise (as long as we do that without delay).

Nic Cicutti: Adviser anger at FOS is misplaced

Professional indemnity insurance costs continue to rise too. This reminds me of a statement made by ex-US president George W Bush to people complaining about the cost of medical treatment in the country.

Doctors were paying 50 per cent of their entire turnover in negligence cover and Bush suggested that, if patients held back from suing them for the slightest thing, the cost of treatment would fall.

The same could be said about the costs from the FOS and Financial Services Compensation Scheme regarding the price of advice.

Rob Reid is principal of CanScot Solutions


SimplyBiz denies cut to member services

Support services provider SimplyBiz will continue to provide its member advisers access to popular risk profiling tool Dynamic Planner next year. Advisers signed up to SimplyBiz can use the tool as part of the support service package. IFAs spoke to Money Marketing in September and October about talk of declining service from SimplyBiz and questions over the future […]


SPA rise from tomorrow will leave many short of thousands

Increases to the state pension age starting tomorrow will leave many soon-to-be pensioners short of thousands of pounds, AJ Bell warns. For the first time since the current pension system was introduced in 1948, men’s state pension age will begin to from 6 December. Women’s state pension age began steadily increasing from 60 in 2010. […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Some wise words at the end there.

    The FCA’s effective doctrine on advice, whether by design, happenstance or lack of cohesive thinking, is that it is better for a small number of consumers to get perfect advice than a great number of consumers to get reasonable advice.

    Advisers may not realise it but this is better economically for them. By restricting supply the FCA’s actions create a sellers market for advice, increasing prices and restricting supply. I suspect most advisers are not morally comfortable with that… but as they speak out often and are largely ignored on the matter they can at least sleep comfortably.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm