She says clients need to be aware of the impact of all the choices made at each stage.
For example, she says even if they don’t intend to make contributions in the future they need to be aware of the impact taking a UFPLS or other income will have on their ability to do this should circumstances change.
She says: “Just because it isn’t an issue now it could become one.”
Given the depth of knowledge required to advise in this area, David Trenner, technical director of Intelligent Pensions, says if you do not specialise in retirement income then you should now consider outsourcing advice.
John Lawson, head of policy (retirement solutions) at Aviva, says advisers should take their time when giving clients any type of advice about the new retirement income rules.
He says: “No need to rush clients to make up their mind now. The new pension rules allow complete flexibility and no harm is done leaving money within a pension until the client’s mind has been made up.”
Another major concern is ‘insistent’ clients seeking, for example, to transfer from defined benefit pensions to take advantage of the new freedoms, despite it being unlikely to be in their interest.
Some, including Personal Finance Society president Keith Richards, have said advisers should not process business in these cases where it goes against recommendations, amid concern that supporting clients could be construed as tacit advice.
Under new rules published by the FCA, all transfers from a guaranteed benefits to flexible benefits will require full, regulated advice advice, even where the move is to a trust-based scheme regulated by the Pensions Regulator.
Transfers from a DB scheme will need to overseen by a transfer specialist holding a qualification such as the CII AF3. Clients are, of course, at liberty to ignore the advice offered.