May 4 2017

Letter to the Editor: DB transfer contingent pricing revisited

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I found myself agreeing with a lot of what Paul Scott said in his recent letter to the editor (FA, 20 April), apart from one important thing.

His example of 10 people paying non-contingent fees for pensions advice with only one completing a transfer misses an important point. The nine clients in Paul’s example have received something very valuable indeed. They have received advice. The value is in the advice not the product. Stopping people from doing something they shouldn’t do is well worth the price of advice that they pay.

Paul though is right about the fact that we all stand wallet in hand behind the advice we provide. So the suggestion that contingent charging is somehow wrong (even though it is not a charging policy I choose to adopt) is itself faulty.

I think instead of wide ranging statements about issues like this, the FCA should resort to its more helpful approach of showing good and bad practice in action; I bet they can find examples of both methods of charging if they try.

Freedom and choice in pensions was announced three years ago so it is a real pity that the issues described in Paul’s letter were not dealt with by the regulator long ago.

Nick Bamford

Chartered financial planner

Informed Choice