PensionsAug 30 2016

SimplyBiz advises on 500 DB transfers in first year

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SimplyBiz advises on 500 DB transfers in first year

SimplyBiz has processed 500 defined benefit transfer requests since it launched its outsourcing service last year, the firm has announced.

Launched in 2015 in partnership with Selectapension, the service provides outsourced advice for financial adivsers who are unqualified or unwilling to advise clients on DB transfers.

The launch coincided with the introduction of pension freedoms in April 2015, an event that has seen a major rise in interest DB transfers. It also coincided with the Financial Conduct Authority’s CP15/7 consultation paper on the regulation of DB transfers.

SimplyBiz compliance director Gary Kershaw said the number of DB transfer enquiries the firm was receiving, concerning the “fine print of DB schemes”, demonstrated this was “a growing business area for both advisers and clients”.

He said a “significant number” of advisers opting to outsource DB transfer advice were actually qualified to provide it.

“I believe that this is because the breadth of a holistic adviser’s role is substantial, and growing all the time; given the option of outsourcing to a specialist service, many have decided that the resulting peace of mind, as well as the time saved, make the bureau the right choice for them.”

Peter Bradshaw, national accounts director at Selectapension, said the partnership with SimplyBiz had “worked very well”.

“Despite recent press highlighting fears that people may be spending their pension money too early, demand for DB reviews continues to grow along with consumer awareness of alternative options available to them,” he said.

According to corporate adviser and director of Corporate Benefits Consulting Allan Maxwell, employers as well as employees are behind the movement to transfer out of DB schemes.

He said his firm had been advising on “a lot of pension transfers” for companies looking to offload some of their liabilities. He said such firms were offering members “enhanced” lump sums to encourage them to take transfer out.

The ultimate aim for many of these companies, he said, was to secure a bulk annuity buyout from an insurance firm, which he said was easier to secure when the scheme’s liabilities were lower.

However, Tiziana Perrella, principal of JLT Employee Benefits’ buyout team, told FTAdviser she expected to see enhanced transfers to slow down, as rock bottom gilt yields meant DB transfers were now more expensive than they have ever been.

james.fernyhough@ft.com