Defined Benefit 

Advisers start charging for triage services

Advisers start charging for triage services

Some financial advice firms have started charging their clients for triage services that were previously offered for free, FTAdviser can reveal.

Russell Facer, managing director at compliance support services Threesixty, said since the Financial Conduct Authority introduced stricter rules on triage firms have started to use third party providers and are charging for the service.

Some are using Money Alive's Final Salary Portal videos which launched as a prototype in November 2017. 

These are made up of a series of 17 short videos, each illustrating a particular issue relating to defined benefit pension transfers, such as what it means for a person's guarantees if they transfer out, or what it means in terms of taxation if they stay.

The FCA has applied a stricter test to guidance services during triage from January. Under this any guidance based on a consideration of a customer’s circumstances "which steers them one way or the other" is likely to be considered advice on the merits of a transfer, and therefore pension transfer advice.

This was after it found a "lack of understanding" among advisers of the boundaries between guidance and advice in its consultation on the matter.

Mr Facer sees no issue with advisers charging for this service, although historically it has often been provided for free. He said it allows advisory firms to spread costs evenly between clients.

He said: "Rather than to have to do the full advice service, there are situations where a triage service would be suitable and beneficial for both the client and the advisory firm."

He said some firms are providing triage services because it is useful for them and will reduce the risk to their businesses, so they bear the costs themselves, while others consider that the triage services is for the client's benefit, so they may charge for it.

Mr Facer added: "They also want to see if the client is actually interested in going forward.

"If the individual isn’t willing to sit through the videos and do the triage, then that tells you a lot about the client anyway; secondly, if they're not willing to put £50 or whatever it is into their own future, which will be cheaper than to have a sit-down with an adviser to provide guidance, again that acts as a service review for the advisory firm."

Ian Beestin, one of the founding directors of Money Alive, told FTAdviser the company does not know of any advisers charging clients to use their triage services, and supports advisers offering the service for free.

Advisers are charged for using the service based on the number of advisers in a firm and the likely number of pension transfer cases within a month.

But Mr Beestin said the service should be beneficial for firms. He said: "Given that the ratio of inquirers to reviews to transfers are key metrics for risk assessment by professional indemnity insurance providers, having a large number of formally recorded inquirers can only help with negotiations.