The FCA have today published a number of pension related proposals designed to improve the quality of pension transfer advice. This includes a proposed ban on contingent charging for pension transfer advice. Simon Taylor, Partner and Actuary, welcomes the proposal and supports the increase in transparency of charges. Please find below his comments on the release.
Simon Taylor said: “We welcome the FCA’s consultation on contingent charging and subsequent proposals. These represent a pragmatic and sensible approach to reduce the conflicts that exist in the adviser market.
“The FCA notes that the supply of advice available to individuals is likely to contract - at least in the short term - as some firms exit the market. We have long been advocates of DB scheme trustees and sponsoring employers partnering with a trusted, impartial adviser to help members navigate through their transfer and retirement options, and we believe the consultation reinforces the benefits of this approach. Carrying out due diligence on an adviser and partnering with them remains the most effective way for advice to be made available to members at a fixed reasonable cost.
"The proposal to introduce an abridged form of advice which can result in a 'no transfer' recommendation is particularly welcome. "
“The proposal to introduce an abridged form of advice which can result in a 'no transfer' recommendation is particularly welcome. It will overcome some of the current concerns arising from the crossover between triaging services and formal advice. In most cases it will not be in a member’s interest to transfer and this proposal should allow them to receive this advice at a lower fee than a full transfer advice process. Enabling members to get this advice is vital.
Finally, we fully support the proposals to increase the transparency of charges that apply to members when they take advice - and when they transfer. This has long been an area which is poorly understood by members, but also by trustees and employers. Increased transparency and disclosure of all charges that apply when an individual chooses to transfer is consistent with trends in the wider pensions market and should lead to better member outcomes.”