Defined Benefit Pension Transfers – an update
Interest in Defined Benefit Pension Transfers has been very high over the last 18 months, largely due to the high Cash Equivalent Transfer Values offered and the flexibility available under the new ‘Freedom & Choice’ pension legislation.
Our regulator, the Financial Conduct Authority (FCA) has, as expected, taken a keen interest on these pension transfers. We are alert to what the FCA are saying and, where appropriate, amend our procedures to reflect their comments and recommendations.
Recent press articles have also contributed to the ‘noise’ around Defined Benefit pension transfers including BHS, Carillion and the British Steel Pension Schemes. We have not advised on any of these schemes. The British Steel Pension Scheme is an unusual case with unique circumstances. One of the key areas the FCA has been concerned with in this particular case is the fact that people did not appear to get individual advice.
We strive to offer our clients the best advice; this means advice personalised to the individual.
We have now decided it is appropriate to move away from the charging basis that we have used to date and, in line with the current regulatory and peer group discussions, we will now charge for the initial pension transfer advice, whether or not you transfer your pension. The FCA believe that this approach will remove any bias to recommend a transfer as the advice will be charged for, regardless of outcome.
For clarity, this means that we could potentially hold two meetings with you, advise you not to transfer your pension and invoice you for this advice.
In the interests of ‘Treating Customers Fairly’ we will only take this approach for new enquiries from today. Any meetings previously booked will not be charged for on this basis as it was not our charging methodology when the enquiry was made.