Selectapension has suspended its defined benefit pension transfer business after an FCA audit of its outsourced advice firm.
The Selectapension Bureau Service handles report writing and transfer value services for pension transfer analysis, but uses IFA firm CFPML to execute advice.
The decision to temporarily close SBS to new business comes amid growing pressure on pension transfer outsourcers as the FCA reviews the market.
A note on the SBS website says: “Please be aware that due to unprecedented demand, we are unable to accept new pension transfer analysis cases for a temporary period. We are working hard to rectify the situation as quickly as possible and apologise for any inconvenience caused.”
An email from support service provider Simplybiz to members, seen by Money Marketing, notes the outsourcer recently had visits from the FCA.
The email says: “As I know some of you are aware, Selectapension Bureau Service recently had an FCA audit as part of the regulator’s review of the marketplace, and I am pleased to say that both parties are satisfied with the outcome of the visit.”
The note says the suspension “whilst being a result of feedback from that meeting was not at the request of the regulator, and was a decision taken voluntarily by the SBS board in order to implement the process changes from the FCA feedback as soon as possible.”
“As with anything in business there are things that you can always do better, and SBS are absolutely focused on improving their current processes in line with some of the feedback received.”
Selectapension says it is confident this will only be temporary, with the firm hoping to open to new cases within the next few months.
Selectapension was used by 7,000 IFA firms, processing 43,570 transfer reports in 2016. The Pensions Regulator estimates a total of 80,000 DB transfers were conducted in the year to March 2017.
A previous Simplybiz adviser newsletter gave details of the deal it has with Selectapension. Through the deal Selectapension offers an outsourced bureau to run pension transfers for Simplybiz advisers. Advisers get 40 per cent of the fee payable if a transfer goes ahead.
The service offers a team of qualified advisers to review cases, and whole of market analysis. The bureau also takes full responsibility for the advice that is given.
Simplybiz compliance director Gary Kershaw says: “Selectapension has done this just to catch up on workloads. We have got no reason to not have a relationship with them. It’s got nothing to do with the request from the FCA whatsoever.”
In June, it emerged Intelligent Pensions had agreed with the FCA to suspend offering advice on defined benefit pension transfers.
Meanwhile, Money Marketing revealed in February that TVAS provider O&M Pension Solutions had started turning down adviser clients because it had reached capacity.
The FCA is conducting a multi-firm supervision exercise into the DB transfer market.
A Selectapension spokeswoman says: “I’m pleased to confirm that the full permissions remain in place following the recent FCA review of our outsource advice partner CFPML. It was, however, recommended that we make some changes to our processes which we are currently implementing.
“We took the difficult decision to suspend the SBS service for new pension transfer requests so we could clear outstanding backlog and to allow CFPML to update their processes. We can assure you that all cases received before 23 June will be processed as normal and that the team is working hard to ensure we can reopen for new business at the earliest opportunity. We apologise for any inconvenience caused at this time.”