The Chartered Institute of Insurance (CII) failed to quiz advisers on changes to transfer advice in a recent AF7 Pension Transfer exam, according to advisers.
Advisers have criticised the institute for leaving out questions about how to deal with transfers in the wake of the new rules despite the Financial Conduct Authority having outlined, in March this year, the changes it would implement on October 1.
According to advisers who sat the exam on September 9, there were no questions asked about the appropriate pension transfer advice (Apta) process or the transfer value comparator (TVC).
Under the watchdog's new rules, which came into force on October 1, financial advisers will have to provide their clients with a value of how much the benefits in their defined benefit (DB) scheme would cost today in the open market.
According to one adviser who sat the exam, the CII had extensively included the rule changes in its syllabus and so he felt shocked when questions about this subject did not feature in the exam.
"In the CII's study book there were sections devoted to Apta and sections that displayed formats of the TVC, including the bar charts they use and examples of assumptions,” said an adviser who wished to remain anonymous.
"We got a fair bit from the CII on the new rules, hence the shock that came when it became apparent that there were no questions on them.
"The FCA outlines what the new rules on Apta and TVC would be, in March, and said they would be implemented in October.
"So the CII had that time to amend at least part of this one exam paper so that it included questions on the new rules, really this would not have taken a lot of effort."
The new TVC required advisers to make assumptions about the inflationary increase applied to DB scheme benefits when valuing the benefits.
The regulator proposed a change to the assumptions to use where minimum and maximum rates apply to inflationary increases.
In its 58-page policy statement titled Improving the quality of pension transfer advice, the FCA has also said that advisers have until October 1 2020 to obtain a level four qualification for providing advice on investments.
Chris Bowmer, director and financial planner at Fortitude Financial Planning, who also took the exam, said that it came as a surprise that the exam was so narrow.
Mr Bowmer said: "I felt that I wasn’t being asked directly about the new Apta rules.
"It was interesting that there wasn't much breadth on pension transfers, tax rules or overseas pensions. It felt like quite a narrow exam.
"The expectations for the new rules came out in March and it was part of the CII syllabus since part of the year. They knew it was happening."
According to a survey of 90 pension transfer specialists carried out by Quilter in September, 56 per cent of advisers failed to identify that a new generic comparison was being introduced.