Clerical justifies DB transfer stance

EXCLUSIVE: Clerical Medical has said it will continue to insist on advisers having inhouse G60 certification in order to make pension transfers from final salary schemes into SIPPs, despite the FSA having changed the rules on qualifications.

The news comes after advisers came forward claiming that Clerical's rules were costing them commission because they had to refer the business to another firm, whereas rival providers allow firms to use an external consultant before proceeding.

Mike Brown, head of pensions product development at Clerical, said that the business has reacted to the FSA's guidance issued at the end of last year in relation to pension transfers and opt outs. Brown said that, while some competitors may not insist on an inhouse G60 adviser for transfers in, the provider insists that it has interpreted the rules correctly.

Despite this, Clerical's sister company Scottish Widows, with which it will soon merge, makes no such insistence. Clerical defended this by saying that the full integration project has not yet been completed and no decisions regarding policy harmonisation have yet been made.

Clerical has been known to request that funds be transferred before asking for G60 authorisation, prompting IFAs to ask for an early warning system to be implemented. One adviser, who asked not to be named said, "I can't imagine other providers doing this. What is the world coming to?"

Money Management consulted the FSA to identify what is the exact guidance for advisers looking to conduct pension transfers. While it does not insist that firms should have a G60 qualified adviser employed, it does recommend that clients are passed to "an appropriately certified specialist" before the transfer is completed.

Connie Flint, spokeswoman for Scottish Widows, said that the company prefers to take a qualitative approach to adviser selection, assessing each case individually. While it would not insist on G60 qualifications, it does consult the FSA's approved list of qualifications before allowing an adviser to conduct pension transfers.

joe.mcgrath@ft.com