Old Mutual Wealth is launching a paid transfer value analysis service (Tvas), after suspending its free service last month, following a tougher stance from the Financial Conduct Authority (FCA) on the potential conflicts arising with advisers who use it.
The service, which will be launched on 14 May, will have a charge of £150 plus VAT per report.
This fee covers the cost of the technical expertise of the transfer value analysis team, the software and the production of the report, the provider said.
In 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.
LV, Scottish Widows, Prudential, and Standard Life have stopped offering this service, while Novia has started charging for its TVAS tool.
Old Mutual has been offering the tool for over 20 years and currently has a highly qualified team of 12 members with over 40 years’ experience, the provider said.
The new Tvas has been refined to ensure advisers can receive an accurate report as swiftly as possible. As part of this, requests for a report will be submitted through a new tool, which will ensure all the essential information is captured, Old Mutual added.
Since April 2015 the number of people transferring out of their defined benefit (DB) pension transfers has been soaring, as savers seek to take advantage of sky-high transfer values and to move their nest eggs into defined contribution (DC) schemes in order to access them using pension freedoms.
According to figures from the Office of National Statistics (ONS), funds transferred out of pension schemes almost tripled to a record £34.2bn in 2017.
Selectapension, which offers a paid Tvas, has seen its DB transfer tool being used in more than 90,000 cases, surpassing the firm’s money purchase service for the first time.
According to Scott Goodsir, managing director of UK distribution at Old Mutual Wealth, a final salary transfer “is often the most important piece of advice that a client will ever receive and having all the right information is crucial”.
He said: “Our new Tvas will help us support advisers and their clients as demand for this advice continues to surge.
“The accurate production of a transfer value analysis report is a key element of the DB to DC pension transfer process and our 12 strong transfer value analysis team are well-equipped to provide swift and accurate analysis.”
For Paul Gibson, managing director of Granite Financial Planning, the main issue for advisers is whether they should be using independent tools versus provider ones.
He said: “If you are a restricted adviser using Old Mutual products only then fine. If you are independent and in this market you should have the resources to pay for an independent tool.”
maria.espadinha@ft.com
