A firm specialising in final salary transfers has begun a recruitment drive, citing a pre-April spike in demand.
James Baxter, partner at London-based Tideway Investment Partners, said: “Along with direct advice to those in or approaching retirement and wondering what to do with their pension funds, we are seeing a major spike in new final salary transfer business – we see this area of our specialist services being in particular demand in the coming months.”
The firm currently has two specialist pension advisers authorised to provide advice on final salary transfers, an additional adviser and a client administrator.
Mr Baxter said: “We are now actively recruiting advisers who have some experience in this highly specialised sector or those with some pensions planning experience wanting to broaden their field of operations.”
The recruitment drive comes after several advisers encountered clients interested in leaving their defined benefit scheme.
Philip Stevenson, director of Cheshire-based Ark Financial Planning, said he had been approached by people wishing to transfer, but this often involved a large amount of work for little money.
Carl Melvin, director of Bridge of Renfrewshire-based Affluent Financial Planning, warned the transfers could backfire.
He said: “It is a very high-risk business, not only because it is technically very difficult to do but from a compliance point of view.
“Even if you go through everything and the person has agreed it, 20 years down the line all the money may have been spent.”
David Finan, managing director of Cumbria-based Jardine Finan Wealth Managers, who was also approached, said: “Our advice is getting people to not rush to do anything for six months. April is not a deadline.”
London-based Yellowtail Financial Planning, said: “We have had a couple of enquiries from people asking if transferring from their DB pot is something they should consider but when we outline the reasons why it isn’t something they should consider, they accept that.
“You know what you are getting with a DB pension and unless it is severely underfunded most people will be taking a risk in transferring out.”
Tom Dean, a financial planner with London-based Plutus Wealth Management, said: “You have got to take each case on its merits and it is inevitable that there will be an increase in demand because the new legislation brings new flexibilities.
“That doesn’t mean it will be appropriate for all, or even the majority, of people. I completely agree with the FCA stance that your default position should be to leave things as they are.”
In a 53-page consultation paper, Proposed Changes to our Pension Transfer Rules, the FCA said: “Our general presumption is that transfers from DB schemes to DC arrangements are unlikely to be in consumers’ best interests.
“However, we accept that there may be a limited number of circumstances where a valid case for transferring can be made – for example, where a consumer has a limited life expectancy.”