Defined Benefit  

Triage: What you need to know

Triage: What you need to know

In the financial intermediary market, the word ‘triage’ refers to a non-advised service – an initial educational process to help potential clients decide whether to proceed to regulated advice. 

In practice, this process often involves advisers showing prospective clients educational videos on complex financial matters.

The aim of triage is to give a prospective client sufficient information about safeguarded and flexible benefits, to help them decide whether or not to take advice on the transfer or conversion of their pension.

Indeed, some advisers operate a triage service as part of their defined benefit to defined contribution transfer advice process.

Triage is not advice

When used appropriately, triage can save clients from paying unnecessary advice charges.

However, a recent consultation by the Financial Conduct Authority found some forms of triage were straying into the provision of personal recommendations, as opposed generic information.

Following a review, the FCA clarified that advice firms should provide an appropriate triage service that gives factual and generic information without stepping across the advice boundary.

The 58 page-long policy statement – Improving the quality of pension transfer advice – published on October 4, said firms should provide generic, balanced information on the advantages and disadvantages of pension transfers.

The guidance is officially due to come into effect in January 2019.

Key points

  • Triage has been introduced as a way to offer clients educational videos about pension transfers.
  • The FCA has been concerned advisers are stepping across the advice boundary.
  • Experts say the definitions are clear

Ian Beestin, one of the founding directors of My Money Alive, agrees that for the triage process to work, it must be completely non-advised.

Speaking at the third Great Pensions Debate at the Royal Air Force Museum in Hendon on November 7, Mr Beestin warned: “Be careful with how much you ask a client... you must never ask questions people are not capable of answering.

“The process starts with educating clients, and our aim with triage is trying to empower clients so they are capable of answering those questions.

“That’s what came first, and we have a module on DB to DC transfers, which is a generic education module talking about their pros and cons.”

Mr Beestin added that it may take some time for triage to “take off”, as advisers are often “a little closed minded when it comes to new ideas in the industry”.

Can you be sued over triage?

Philippa Hann, a solicitor at Clarke Willmott who is leading litigation action on behalf of British Steel workers, believes if advisers are clear in their contracts that they are not going to give advice on pension transfers, that is a good start.

Ms Hann, who also spoke at the Great Pensions Debate, told delegates: “Clients will sue when they are disappointed, or when something has gone wrong. But I can only sue you if you breach the regulatory rules, not when you breach the guidance.

“If I were to sue you over mistakes in triage, what would I sue you for if you have not given bad advice, even if it is advice that you did not suppose it to be because it is part of this bizarre thing called triage?