Speaking at The Great Pensions Transfer debate this morning, he said that “when it comes to contingent charging this is clearly area where firms need to think about how they operate”.
Mr Percival, a Chartered Financial Planner, said: “If you operate on this basis at the moment, I seriously suggest you move to a non-contingent charging basis.
“I think in the long run, the sector should move to non-contingent charging anyway.
“I think it’s the more professional approach that reflects what you actually do. The value is in the advice that you give, therefore the cost should be relating to the advice you give, not the execution of that advice.
“That is a big change for the sector, I don’t see it changing anytime soon maybe 10-15 years down the line non-contingent charging will become the norm.
“I would like it to become the norm. I think it will be a good indicator of the sector actually becoming a profession, which I don’t believe it is at the moment. To become a profession, I think that’s one indicator.”
He recommended that planners “consider areas where you can move to non-contingent charging now” - including DB Transfers - as it will help to deal with the associated bias involved “very, very significantly”.
He said: “If you work on non-contingent charging basis and you have a stay or go analysis that is fully costed then you have mitigated that subconscious bias you have got significantly.”
Mr Percival said this approach “would be viewed very positively by the FCA if you act that way.”
Talking about suitability of advice, he also told delegates that he believes it is “easy for advisers to manipulate clients’ objectives”.
He said he has seen that happen in a lot of file reviews while working at the FCA.
He said he could be less diplomatic than when he was at the FCA and wouldn’t have necessarily said that in his old job.
He said: “This is a financial planning issue, not a regulatory issue as to whether things are suitable or not.
“The regulator doesn’t have any preconceived ideas about the circumstances under which it is right to transfer or not transfer. It sets a default position but it’s a planning issue as to whether it’s right to transfer or not.”
The Defined Benefit pension transfer discussion day has been organised by adviser Al Rush, who runs Echelon Wealthcare and set up robo-adviser Fiver A Day.
The Financial Conduct Authority recently announced it will publish a consultation paper on DB to DC pension transfers in an update on the Financial Advice Market Review.
Mr Percival said he expected this to be published on Wednesday.
#pensiondebate Pensions rock @PensionDebate takes over the Peterborough Arena pic.twitter.com/lfhczlD76N
— Gillian Cardy (@RedKitesMoney) June 19, 2017