Standard Life says advisers should have to weigh up the benefits of a partial transfer as part of new defined benefit pension advice rules.
The provider has called for partial transfers to be a mandatory requirement in the FCA’s upcoming DB pension regulations, saying it would offer more flexibility to customers and move away from the current “all or nothing” approach.
The FCA published its consultation paper on advising on pension transfers in June which proposes, among other things, removing guidance that asks advisers to assume defined benefit transfers are unsuitable.
Standard Life financial planning propositions head Alastair Black says: “The FCA consultation is an important exercise in reaffirming good practice which we absolutely welcome. We would like to see it go that bit further and use the opportunity to embed the value of partial transfers in the regulations, so that a partial transfer must always be considered as an option for consumers during the advice process.”
Black says: “We recognise that some schemes offer this and others don’t and that’s down to the decision of scheme trustees. Embedding the requirement in the DB regulations on advice for it always to be considered as an option, will ensure it is used appropriately where available.”
He adds: “If partial DB to DC is more embedded in the advice process, we would expect to see more people deciding to opt for a mix of guaranteed and flexible income at retirement, rather than facing an all or nothing stalemate.”
The future of DB transfers will be debated at Money Marketing Interactive, held at the Majestic Hotel in Harrogate on 14 September. To join more than 100 advisers at the event click here to secure your free place.