‘Pensions transfer specialism to become standard’: Tenet

‘Pensions transfer specialism to become standard’: Tenet

Gill Davidson, group regulatory director of adviser support service provider Tenet, warned that her network believed that the FCA will declare that “the pensions transfer specialism will become an increasing part of the adviser toolbox”.

At present, rules surrounding transfers mean advisers must hold a specialist qualification to process switches, unless the client is going to ‘crystallise’ their fund and start taking benefits immediately.

However, if the purpose of the transfer is to crystallise benefits then the FCA does not currently require the adviser to have the pension transfer qualification, nor the firm to have the pension transfer permission.

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Ms Davidson said: “We have already seen an increase in enquiries about the pension transfer specialism in recent weeks.

“It is important to recognise that although there will be more reasons why clients may wish to take advantage of a pension transfer, the disadvantages must be clearly explained.

“It is crucial that clients are fully informed and understand the risks as well as the potential benefits.”

However, Jared Aitken, head of media relations for fellow network Sesame Bankhall Group disagreed that pension transfer specialism would need to become standard.

He said that, for several years, the network’s internal rules stipulated that on all transfers from defined benefit schemes to any type of defined contribution arrangement could only be conducted by a pension transfer specialist.

He said this was due to similar concerns as those currently being raised by the FCA, but added: “Advisers can still consider DB schemes within pension planning, they just cannot make a personal recommendation to transfer out without meeting the pension transfer specialist requirements.

“Although there will be a clear customer need for such advice, processing high levels of DB transfer business may well be outside of the risk tolerance of most advice firms.

“As such, we don’t necessarily believe that ‘pension transfer specialism’ – within the meaning of FCA rules – will become a standard part of the adviser toolbox.”


Earlier this month, Chris Hannant, director general of Apfa, warned that pensions transfer specialism will become a big issue for the industry, especially as the FCA is currently consulting on rules that would make it necessary to advise on a much wider range of pension benefits.

An FCA spokesman said that the regulator had consulted on changes to the transfer rules.

In the consultation paper, Proposed Changes to our Pension Transfer Rules, the FCA called for responses by 15 April so it could put updated rules in place for June 2015.