Research by Investec Wealth & Investment showed that 65% of 108 financial advisers surveyed expect cliented enquiries about transfers from Defined Benefit to Defined Contribution pension schemes to increase over the next 12 months, with 19% expecting a “significant” increase. In contrast, just 2% expected a fall in enquires.

Other findings were:

• 72% of the 98 advisers polled have received DB transfer enquiries, up from 68% in July 2016

• IFAs predicted that, on average, they will continue to receive enquiries for a further nine years, generating a substantial long-term new business opportunity

• The top reason given (cited by 71% of respondents) was that the risks associated with challenges to historic advice were too high

• 47% said that the process is complex and clients are resistant to paying appropriate fees while 45% cited a perceived lack of regulatory support

• 31% fear that there is too much of a focus by the regulator on the ‘headline’ figures involved in a DB transfer at the expense of ‘softer’ client needs

Despite the volume of potential business, the findings revealed why many IFAs are declining to provide DB transfer advice.

The top reason given (cited by 71% of respondents) was that the risks associated with challenges to historic advice were too high. Nearly half (47%) of advisers said that the process was complex and clients were resistant to paying appropriate fees while 45% cited a perceived lack of regulatory support. Almost a third (31%) of IFAs feared that there has been too much of a focus by the regulator on the ‘headline’ figures involved in a DB transfer at the expense of ‘softer’ client needs.

Mark Stevens, head of intermediary services at Investec Wealth & Investment, said: “As the wider market environment adapts to a ‘new normal’, the values being placed on DB scheme transfers have become very attractive and the demand for qualified advice shows no sign of slowing down. “DB scheme transfers have increased the opportunities for IFAs to advise new clients on their pensions and broader financial needs. However, it’s a fast-changing market and the complexities and risks involved mean that in many cases discretionary investment managers are integral to the effective management of client portfolios.”