Advisers’ concerns about offering clients a DB transfer service will have been heightened by last week’s news about Intelligent Pensions, says Steven Cameron, pensions director at Aegon.
The FCA must place top priority on consulting the sector on DB transfers, he said.
He made the remarks after Intelligent Pensions said last week it was immediately halting advice on DB pensions transfers, following discussions with the regulator. The firm said it had volunteered to suspend this service on a temporary basis.
The FCA’s register stated the company had to “immediately cease to provide advice in relation to the transfer, or conversion, of safeguarded benefits under a pension scheme to flexible benefits”.
Mr Cameron said: “The news that Intelligent Pensions has agreed with the FCA to suspend advising on DB transfers will add to concerns advisers already have over offering their clients this service.
“With demand already far outweighing supply, the FCA must place top priority on progressing a consultation on DB transfers.
“Regulatory expectations need to be updated and made 100% clear, not least to reflect the new pension freedoms.
“Without clear expectations from the FCA, advisers aren’t able to get on with advising their clients and the market can’t operate effectively.”
A few weeks ago The Pensions Regulator said around 80,000 transfers out of DB pension schemes were made in the last year.
It stated: “For the period of 1 April 2016 to 31 March 2017 defined benefit pension schemes have, in total, reported 67,700 transfers out of the scheme.
“However, not all of these schemes have reported how many transfers they carried out. Our estimate is that there were around 80,000 transfers made. We do not hold this information for previous year.”
This came about a month after an actuarial firm revealed the number of DB transfers completed in the first three months of 2017 increased 166%. The rise, which was based on comparisons with the same three-month period of 2016, was reported by Xafinity Group.