Standard Life Aberdeen is withdrawing its transfer value analysis service (TVAS), following a tougher stance from the Financial Conduct Authority (FCA) on the potential conflicts arising with advisers who use it.
On Monday (26 March), the regulator published a policy statement on advising on pension transfers which said it was now of the view it was "unlikely" providing or accepting free software for transfer value analyses would fall on the right side of the regulator's inducement rules.
Due to this, Standard Life Aberdeen has taken the decision to withdraw its TVAS service with immediate effect for any new requests, it announced in an email sent to financial advisers today (28 March).
Any pipeline requests will be completed and if there are any requests for re-quotes the provider will produce these. However these must be submitted by 5pm on 6 April.
Standard Life Aberdeen said it had introduced this service to “meet the increase in demand within the market” and it was willing “to support adviser businesses”.
The regulator has been moved to further probe the defined benefit transfer market after a a string of allegations of bad practice as retirees rush to take advantage of pension freedoms rules.
Highest profile among these has been the plight of British Steel workers, who it has been alleged have been targeted by unscrupulous advisers and unregulated introducers as they seek to transfer out of the company's pension scheme before it is forced into the lifeboat Pension Protection Fund.
In Monday's report on advising on pension transfers - which floated the idea of banning contingent charging for transfer advice to stop conflicts of interest, as well as requiring pension advisers to get further qualifications to practice - the FCA made clear it had its eye on bias between advisers and providers.
"Where platforms or providers make free [pension transfer] software available to advisers, firms should be aware of our rules on accepting benefits from providers.
"We have modified the rules and guidance on inducements for non-Mifid business to mirror more closely the new Mifid II inducement rules.
"This means that non-monetary benefits which were previously not included in the inducement rules are now included.
"We consider it is unlikely that providing or accepting free TVAS or Apta software would fall within the narrower definition and so should not be used. As a result non-monetary benefits which were previously not included in the inducement rules are now included."
At the time of the publication of the report, providers said they were considering the impact of the regulator’s decision.
Darren Cooke, chartered financial planner at Derbyshire-based Red Circle Financial Planning, said he agreed with the watchdog's tougher stance on this matter.
He said: “I've never used one of these services, never would. I've seen the output provided by one of these provider services, it was woeful, I would not wish to base my advice on the information provided in the report I saw.
“To me there would always be a problem to use a provider service for something like this. All your research and planning should be independent for providers and provider supplied tools to maintain full independence in your work for the client.”
maria.espadinha@ft.com
