Some financial advisers are being asked to sign documents stating that advice has been given when none has, so that consumers can circumvent new rules that require insurers to check advice has been received before agreeing to transfer a defined benefit pension.
Lee Tomkins, IFA at Blackdown Financial Independent Financial Advisers, told FTAdviser that he and others at his firm had received a number of enquiries from “vested clients”, who just want a letter stating they have had ‘advice’ as pension providers will otherwise not let them transfer.
Another adviser, Ed Fairey, managing director of IFA Fairey Associates, also said he had been approached by prospective ‘clients’ wishing to pay a nominal fee to get a letter saying they had taken advice.
Under new regulations that were proposed earlier this year, anyone with a DB pension pot of more than £30,000 must seek regulated financial advice, though they are not obliged to follow the recommendation given.
Those consumers approaching do not want the advice but simply the signature on the paper stating they have taken advice.
Mr Tomkins told FTAdviser that he himself had been approached by a handful of clients, as had other advisers in his firm.
“They don’t really want advice just the money, but the provider won’t let them have the money without a letter saying they have received advice. It looks like this ‘pension freedom’ isn’t quite the freedom they were expecting.”
Last week, FTAdviser asked providers if they would carry out a transfer if a consumer was advised against doing so, with a number stating that while they need to ensure regulated advice has been received they are not under any obligation to check what the advice was.
Mr Tomkins said he is telling the individuals that “advice needs to be given to provide a letter stating they have received advice”.
In a letter sent to such a client, seen by FTAdviser, Mr Tomkins detailed what the advice process would include as well as the charges.
The letter concluded: “We would be happy to help you, and are receiving a lot of these type of enquiries at the moment, but there is a process we have to go through in order to make sure the advice we give is right, and of course we are legally liable for our advice.”
Another adviser told FTAdviser he has also been approached by prospective clients.
Mr Fairey said: “We have had clients that have tried to get us to do that because providers aren’t allowed to let clients have their money without advice. The government is saying ‘we trust you’ then the regulator is saying ‘we don’t trust you’.”
Martin Evans, director of Prism Independent Financial Advisers, told FTAdviser that while they have not yet had anyone ask for a fake advice signature, the firm has refused transfers on the grounds of “insufficient secure income in retirement based on attitude to investment risk”.
“We will not be signing any forms without full advice and will not sign unless we agree it is right to do.