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Sipp firms split over insistent clients


The Sipp market is split over how to deal with so-called insistent clients who want to transfer out of defined benefit schemes.

Despite FCA guidance published in June, advisers and providers remain concerned over the potential for future claims on pension transfers.

According to data collected by the regulator as part of the Treasury’s probe into pension freedoms, around one in five advice firms will not work on DB transfer business at all.

And some providers, such as Suffolk Life, Curtis Banks and Rowanmoor, are exercising a blanket ban on accepting in transfers from DB schemes where this is against the recommendation of an adviser.

However, AJ Bell will take customers as long as they have met the Government’s requirement to take specialist advice on transfers worth over £30,000.

James Hay say they are taking a “very cautious approach” but may accept insistent clients in “some circumstances”, such as where the client is judged to be a sophisticated investor.

Dentons director of technical services Martin Tilley says: “If an individual has gone to an IFA and the recommendation is don’t do the transfer then we have a blanket ‘no’ policy. If however, they have gone back to the IFA and they then treat them as an insistent client and decide to facilitate the transfer then we will take it.”

Fairey Associates managing director Ed Fairey says: “At various points around the industry providers are recoiling from the risk. Every provider retains the right to decline business, whilst they may be asking for reassurance that advice has been taken and whether or not the client is insistent, none of that is driven by legislation. It’s driven by providers’ fear of potential claims being made against them in the future.”


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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Let’s stand back and ask why there is such a range of different views and approaches here.

    The simple answer is that the regulator (within which I include the FOS) has failed to make it clear what is, and what is not, acceptable. If firms are confused then clients will suffer. If firms are afraid of making mistakes then clients will go without advice and services. The FCA need to step up to the plate, stop worrying about their own skins, and provide definitive guidance so that clients can be safely served.

  2. Seems to me the regulators have endeavoured (in their own eyes at least) to clarify matters, (and there is some debate on that) but such is the level of distrust in the industry that any such re-assurance is felt that it cannot be relied on nor changed by a future regulator / government ruling. Such is the price the consumer must pay for the “war of attrition” we currently endure…

  3. Who in the industry can resolve this as someone must. We should be doing the best for our customers and not feeling too afraid to do so, but with PFS saying done touch insistent customers, providers scared of any risk, networks trying to protect everyone and very risk averse, and advisors just seeing it as too much hassle or hiding behind insistent customers processes I am just getting to a level if complete exasperation – what I do know is that customers clearly are not getting the beat out of this and pension freedoms us currently a complete misnomer. We have mixed up poor practices with appetite for risk issues and it is all mixed up un same scary pot.

    Customers have very important objectives to meet both short and long term and given it is their money- should be able to decide which ones they want their advisors to deal with. They have a number of assets and investments and resources to use and our job is surely to use what they have and find the best solutions to meet their objectives and make sure they understand the consequences if their actions- this doesn’t mean by being order takers or taking shortcuts, or going straight for a solution before considering the options and doesn’t mean having to weigh up the conflict of the advice and getting paid. We need good solid unconflicted advice given with the background of understanding that pension freedoms means that advice is very different than it was a year ago- that is for positive advice on pension freedoms but also dealing with insistence where it arises.

  4. Unfortunately, all that the FCA and the FOS have achieved is to create a web of fear amongst advisers and the pension providers, who simply want absolute rules clarity instead of constant obsfication, denial and lack of direction.

  5. The claims companies have already moved on from PPI to investments which lost money, I cannot imagine that they would pass up the opportunity to encourage customers to plead ignorance after they have wasted their pension pots. These are the real enemies, so make the rules very clear, and close any future compensation routes through these vultures.

  6. All of which means more business for those unscrupulous advisers who will stick anything through on an ‘insistent client’ basis. The same firms that will, when the claims start being upheld, fold up their tents and let the FSCS (i.e. the reputable firms) pick up the tab.
    So, in short, we pay if we do transact this business. We pay if we don’t.

    You gotta love financial services regulation

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