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Standard Life: Would a ‘triage’ system relieve DB transfer pressure?

Soaring demand for specialist defined benefit pension transfer advice is stretching available adviser capacity to the limit.

A pre-advice “triage” system is key to managing this demand efficiently.

The FCA rules are clear. An adviser’s starting assumption should always be that a DB transfer is not suitable. A transfer to DC should only be recommended if it is clearly in the client’s best interests.

But the lure of high transfer values, and the attractions of pension freedoms, are driving significant numbers of people who need their guaranteed DB income to consider trading it in.

Getting a triage system right would help advisers quickly identify if a transfer to DC is likely to be more appropriate for the client than sticking with DB. It would also help the client better understand if moving from the safe DB environment is likely to be right for them before incurring the time and expense of full transfer analysis and advice.

At a high level, the complications of DB transfers can be chunked-down to four key considerations:

Triage uses simple questions, and broad rules of thumb, to probe these four areas and quickly assess whether DB is a good fit for the client or if a transfer might be appropriate and merits proceeding to advice. For example:


  • What income do you need in retirement and how does your DB pension compare to this? [A streamlined factfind should capture this.]
  • Are you comfortable taking investment risk? [Standard attitude to risk tools can draw this out.]
  • Is tax or legacy planning more important to you than a guaranteed income?


  • Is the transfer value good value for you? [This can be broadly assessed using simple metrics, such as transfer multiples, that is, transfer value/ accrued DB pension]
  • Are you in good health?


  • Do you need the guaranteed DB income?
  • Could you run out of money if you transfer? [Again this can be broadly assessed using simple metrics, such as ‘draw rates’ – that is set a maximum level of income expectation against the transfer value to spot people that clearly should not transfer. This can be explored in more detail if get through triage.]
  • Do you have other assets to fall back on? [Standard capacity for loss tools can assess this.]


  • How do you feel about moving from a safe, guaranteed retirement income for life to a flexible pension pot subject to market fluctuations?
  • What is it about the guaranteed income for life which does not appeal to you?
  • What will you do if you transfer and your plans go off track?

A skilled adviser can cover this triage off in a short telephone call, reaching agreement with the client on whether or not it is right for them to move to transfer analysis and advice.

This means advisers can save time to focus on those clients that need full advice, and save a lot of prospective clients time and money if they work out quickly it is not right for them.

There is also advances in artificial intelligence and interactive technology to think about. Do these raise the possibility of not just triage, but online triage systems. These could help the majority of savers with simple needs to work out for themselves that they are best sticking with DB, and filter the remainder, where a transfer is more likely to be appropriate. This would then link up with advice, and free up adviser capacity to serve them.

Alastair Black is head of financial planning at Standard Life


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

  1. Very interesting and useful contribution to the debate.
    Although it is just a summary of the process I would add a further question under “Understanding” – would your feelings change if you only received 90% of the ”, guaranteed retirement income…”.
    Given the funding state of many DB Schemes, information regarding the funding level of the scheme is an essential ingredient of any report.

  2. I suggested a triage process to my old compliance team as was trying to take the conflict out of the process but they were not in favour which I disagreed with at the time as thought the alternative was worse. The new Treasury paper on advice does mean that the outcome of the review- stay or go is a personal recommendation. Also someone needs to be clear whether the customers wishes have any bearing or not- my last compliance department was adamant it was a financial question of CY only. And finally this means that the initial decision about transferring is made before considering where the money in to be invested- which is quite dangerous unless the two parts are linked and dependent on each other? Just my thoughts- I am personally in favour of splitting the two parts.

  3. Richard Anderson 17th March 2017 at 9:18 am

    very interesting article. Is it just a coincidence that there is an Aberdeen advertisement banner above the article ???

  4. Killer question: What is it about the guaranteed income for life which does not appeal to you?

    Attended a very useful SLI seminar about this precise topic which got right into the nub of the considerations and got into lots of detail – including the triage approach.

    Our concern is that DB income can of course be quantified (as can losses once there is hindsight) and therefore how do you quantify the subjective nature of ‘flexibility’ within the argument when the client is prioritising flexibility and choice above of the aforementioned guaranteed income for life… particularly when memories become short if another 2007/08 scenario occurs.

    I’m sure if the advice was simply ‘you want X and your DB can’t offer than, so do Y and in doing so you sacrifice Z’ that it would fall down under scrutiny but in most other areas of advice, that’s simply what takes place. DB however is a minefield – so much so, many advisory firms won’t touch it with a barge-pole due to the perceived potential liabilities when/if claims come in when the risks the clients were warned about come to be reality.

    The comment I heard yesterday was ‘I don’t want to be the richest 80 year old in the care home, I want to enjoy an early retirement’ – an example of the view of those who are seeking DB advice – those approaching us on DB typically don’t want an ever escalating inflation proofed pension until they die – they want something which meets their current objectives and if that involves giving up guarantees, (in their view) so be it.

    This mindset can be further evidenced IMO by the reaction following the freedoms where annuity sales fell for the same reason.

    • Once again I agree with you Paul and this is why I haven’t got pension transfer permissions although it has recently proved a pain in the proverbial not being able to advise on guaranteed annuity rates or guaranteed pension incoem as found on some historical Pru pensions. I have so few clients with these old plans, paying the FCA for a variation of permissions for something I could have done 2 years ago based on common sense is rather annoying.
      DB transfers however IS a minefield and I think a triage service which separates the relationship manager (that’s the role I undertake with my clients) from the DB tf authorized individual makes sense. If the consuemrs reasoning is not logical, then the cost of DB transfer advice can and often will put them off…. if their logic for why they want a tf makes sense to us, then the cost of obtaining the advice can be balanced with the risk of not taking it and the consumer make an informed decision. many of the DB tf firms will charge a minimal up front fee to see if going further makes sense, so the consumer doesn’t have to spend to much simply to get an answer DON’T transfer.
      Again the pension freedom change which meant that wheras an adviser without DB permissions COULD advise on a transfer at the crystallisation stage, that they can no longer do so is now another pain as that is a much more straightforward comparison as it is little different to comparing annuity rates based on a CETV when comparing a rigid income from a vesting DB scheme.

  5. CTC agrees with Standard Life’s approach to triage for DB members looking at transferring. The challenge is how to deliver it. Everyone agrees there is a huge gap between DB members considering transferring and the number of advisers able to explain their options. Alistair Black suggests an initial call with an adviser to triage – but even this step is non trivial; who has the time and who will pay. As indicated at the end of the article smart technology can engage the member and help them reach a first stage conclusion for themselves.

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