Defined Benefit  

British Steel IFA transferred 64 clients in one-off deals

For Alistair Cunningham, financial planning director at Wingate Financial Planning, “most people should not have transferred out of the BSPS, and those that did should really be in such a unique set of circumstances that ongoing advice is likely to be needed”.

Mike Lacey, partner at Berkshire-based financial adviser firm Bowman Pension Consulting, argued that a decision from the client not to take ongoing advice “puts advisers in an extremely awkward position”.

He said: “It has to be of concern when no transfer clients want to pay for post transfer advice. The likely sums involved mean that there is, obviously, a great deal at risk and with pension freedoms, the sheer volume of choice facing these clients is vast.

“To make the wrong decision could have a catastrophic impact on those clients and their dependents.”

“Obviously, you can’t force people to pay for a service, and the service should not be free,” Mr Lacey added.

However, he said that he “would be very uncomfortable with clients declining post transfer guidance and support” and that he would make his concerns very clear.

Martin Bamford, chartered financial planner for Surrey-based Informed Choice, argued that it is “important to give clients the option of an ongoing advice service at the start of the relationship”.

He said: “Not every client will want to pay for ongoing advice, and advisers should only be paid when they deliver an ongoing service.

"But I would be very nervous about only giving upfront advice, with an intention to offer an ongoing advice or review after two years.”

Mr Bamford added that he has a structured ongoing advice service with all the clients he works with.

He said: “This is just as important, arguably even more important, than the advice we deliver up front.”

The Work & Pensions select committee, which held hearings with steelworkers, financial advisers and regulators amid concerns about the financial advice being given to the members, will publish a specific report on this case early this year.

Following intervention from the Financial Conduct Authority (FCA), nine firms have decided to stop providing advice on pension transfers.

In the meantime, the regulator revealed that will be collecting data from all financial advice firms which hold pension transfer permissions during this year.