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.”