Scottish Widows is the fifth firm to halt transfer value analysis report services as the FCA looks to crack down on unsuitable defined benefit transfers.
The decision follows those from LV=, Pru, Standard Life and Old Mutual Wealth after the FCA said the reports could act as inducements.
The paper noted many market participants had argued free TVAS software offered by providers presented a conflict, given it is an integral process to providing a recommendation and was an incentive to attract new business.
Under Mifid II, the rules on accepting non-monetary benefits from providers were tightened.
The FCA strengthened its own rules on inducement at the same time, and now considers that accepting free TVAS software would fall within this definition so should not be used.
A Scottish Widows spokeswoman says: “We have withdrawn our free TVAS service until further notice. To avoid disruption for advisers and their clients, we will fulfil the small number of existing requests that are already in progress.”
LV=’s TVAS service, which is provided in-house for its own advisers and third party advisers, has also been stopped but any cases currently in the pipeline will be completed, including any re-quotes received by 6 April.
An LV= spokeswoman says: “LV= is fully supportive of the regulator’s moves to increase consumer protection in the DB transfer market, as it’s absolutely vital that only those who would benefit from the pension freedoms transfer out, and not anyone who would be worse off as a result.
“We recognise there continues to be strong consumer demand in this space and we are looking at what support we can continue to offer advisers to help them in this area of pension planning.”
A Pru spokesman says the withdrawal of the service came into force on 29 March.
He adds: “This follows the publication of the FCA policy statement where it has made it clear that is neither acceptable for a provider to offer this service without charge or for an intermediated adviser to accept such a service.”
Reacting to this news, Aegon head of pensions Kate Smith says: “It comes as no surprise to see that a number of firms have decided to stop offering free TVAS reports as a result of the new FCA regulatory clarity on DB transfers.
“The FCA was clear in outlining that free software from providers, whether TVAS or its replacement under appropriate pension transfer analysis, will fall foul of inducement rules and will no longer be acceptable to the FCA.
“Aegon does not offer TVAS reports to advisers and we welcome the move away from TVAS and replacement with a more holistic appropriate pensions transfer analysis.”