Personal Pension  

Intelligent Pensions launches DB transfer service

Intelligent Pensions launches DB transfer service

Intelligent Pensions has launched a new service for advisers undertaking defined benefit scheme to flexi-access drawdown transfers.

From 6 April, it became mandatory for anyone moving from a DB scheme to take regulated financial advice, except where total savings are less than £30,000.

Advisers have frequently pointed to a growth in demand, but many have expressed concern over a potential lack of supply in terms of pension transfer specialists with an AF3 qualification or equivalent.

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The drawdown specialist’s service is aimed at those who do not have the required authorisation from the Financial Conduct Authority or simply do not want the risk of handling these types of transactions, which are set to increase in popularity with the introduction of pension freedoms earlier this month.

Intelligent Pensions reported a 440 per cent increase in DB transfer enquiries over the past six months and has had discussions with several companies looking at potential DB transfer exercises as a means of enhancing the balance sheet.

The firm charges an initial advice and analysis fee and then a set up charge to carry out the transfer. Advisers will then have the option to take over the new plan with full ongoing responsibility for the advice thereafter.

Alternatively, responsibility for the ongoing advice and management of the drawdown plan can be retained by Intelligent Pensions using its own self-invested personal pension, but with the introducing firm having the option to act as investment agent, with ongoing remuneration for processing investment transactions.

Steve Patterson, managing director at the firm, explained that whether using the pass-back or ongoing advice route, the service will enable all advisers to get involved in this growing and important area.

“I have no doubt the demand will come and with the new requirement for specialist advice to be taken prior to transfer, this becomes a huge opportunity for the financial services industry to start rebuilding consumer confidence.”

Intelligent Pensions also highlighted that for cases where drawdown is a more suitable option than an annuity, the critical yield will be far less severe, making transfer more likely, although a key aspect of the advice will be assessing the client’s ‘capacity for loss’ - which is a core element of their drawdown advice process already.

Last month Simplybiz got involved in this burgeoning market by introducing a service which allows advisers to outsource clients seeking to move out of a DB scheme where they do not hold the relevant qualifications.

peter.walker@ft.com