Novia bucks trend with pension transfer value charge

Novia bucks trend with pension transfer value charge

Novia will charge for its transfer value analysis service (TVAS) rather follow rivals and scrap it in the wake of a regulatory clampdown on the "inducement", the platform has announced.

It comes after the regulator said it was "unlikely" providing or accepting free software for transfer value analyses would fall on the right side of inducement rules designed to stop conflicts of interest that act against what is best for consumers.

Yesterday (3 March) LV, Scottish Widows and Prudential all stopped offering the service. They followed in the footsteps of Old Mutual Wealth and Standard Life, which took the step last week.

But Novia has decided to continue offering the service, instead charging £75 plus VAT, effective from Friday 6 April.

In a statement last night (3 March) Novia said: "We have been in regular communication with the Financial Conduct Authority about our TVAS service and we are confident that the adoption of a charge will prevent any possible readings of inducement.

"Whilst we would ideally prefer to keep our service free of charge, our main priority is to keep the service running so that our advisers can continue to benefit from the flexibility and fast turnaround that is driving our industry recognition."

The charge covers Novia's costs and will be payable by adviser firms using the service.

Novia has said it will not levy a charge for the completion of any existing cases, or any cases which require a re-quote.

The Financial Conduct Authority made the comments about TVAS services in its policy statement on the provision of advice for pension transfers, published last week.

The regulator is trying to prevent defined benefit transfer failings following a string of allegations of bad practice, most notably around the plight of British Steel workers.

It has been alleged the workers were targeted by unscrupulous advisers and unregulated introducers as they sought to transfer out of their company's pension scheme before it was forced into the lifeboat Pension Protection Fund.

Last week's FCA report also 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 regulator retreated from plans to change its assumption that defined benefit transfers are usually unsuitable.