Defined Benefit 

Changing attitude to DB transfers

  • To get up to speed with the latest debates over DB transfers
  • To understand how the DB transfer market is working
  • To learn some of the basic points about DB transfer advice
Changing attitude to DB transfers

The current hot topic continues to be defined benefit (DB) transfers. As I talk to advisers up and down the country I have noticed something of a change in attitude to transacting such business.

Whereas many advisers I had spoken to previously said they would never transact DB transfer business, I am now finding that even the staunchest naysayers are looking more closely at developing a process. The overriding message now coming through is that this is a complex subject in need of a total overhaul.

The subject is covered in the press from all angles. We have had discussion of a triage system before the DB transfer process begins, calls for a review of transfer value analysis (TVAS) assumptions to take account of the growing demand for income drawdown and even changes to the rules on quotation validity and timing to allow the transaction of business to be streamlined.  

In essence, we are coming to a point where what was once a technical consideration for the few is becoming a mainstream process for the many and, as such, it is now even more important that the whole process is the best it can be for all parties. Adviser firms have stepped up and are taking on transfer specialists, training existing staff or developing outsourcing relationships with third party specialists.  

What follows is an objective look at the process. 

To start with let’s look at the customer proposition, that is, where the problems start. 

As we know, if the transfer is more than £30,000 there is the requirement that people purchase a service (financial advice) that they might not want to pay for. There is then the chance that the price they pay will not get them the result they want and they will have to pay the fee and walk away in exactly the same situation as they were before.

How many other consumer transactions have a similar profile?

In December last year, Michelle Cracknell, chief executive of the Pensions Advisory Service (TPAS), was quoted as saying that we were dealing with a “market failure” with demand for a service at a given cost, but no supply of such a service.

It really is a sellers’ market, with advisers able to set their prices accordingly. As I was writing this article I received an email from a member of the public that encapsulated the whole issue.

They said: “So the predicament that we have is trying to find an adviser who will look at the situation (given that we have to take advice) and not demand an exorbitant fee for this or the transfer, should that proceed. That seems to be extremely difficult given that we have had some eye-watering sums quoted to us so far. It also appears we are far from alone in finding difficulty in trying to achieve what we believe is the sensible thing to do with my wife’s pension fund.”


  1. At what level of DB transfer does an individual need to take advice?

  2. The DB transfer market is currently a buyer's market. True or false?

  3. What is the first prescriptive that author would like to see removed?

  4. There is a wider definition of beneficiaries in the flexi-access drawdown regime than in DB schemes, true or false?

  5. What might an adviser's first task be?

  6. The author's friend's first quote for a fee for DB transfer advice was how much?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • To get up to speed with the latest debates over DB transfers
  • To understand how the DB transfer market is working
  • To learn some of the basic points about DB transfer advice

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