According to a survey from Aegon, which polled 211 IFAs, nine out of 10 (89 per cent) advisers - who are or have been active in DB transfers – thought there were still a lot of people who would benefit from taking advice.
More than half (55 per cent) of advisers said demand from individuals wishing to explore their options remained high and only a quarter (25 per cent) of IFAs thought most of those interested in transferring have already taken advice.
But Aegon stated the supply of advice was being hampered by complex regulation and the problem with professional indemnity insurance which saw many advisers struggle to obtain affordable cover.
In April, the Financial Conduct Authority increased the ombudsman's award limit from £150,000 to £350,000, and as a result some advisers have struggled to find sufficient PI cover or had to wrestle with higher excesses, restrictions on DB transfers and even the possibility of "shared liability" on claims.
The FCA at the time suggested the sector could see a 140 per cent increase in PI costs from the change in a "worst case" scenario, which could see up to 1,000 "higher risk" personal investment firms stop providing defined benefit transfer advice.
Aegon’s survey showed that only a third (36 per cent) of advisers who provide DB transfer advice thought there were enough advisers to meet the current demand.
Seven in 10 (69 per cent) IFAs also believed that FCA regulations erred too far on the side of not recommending transfers.
The regulator published last week (June 19) the results of its survey of 3,015 firms between April 2015 and September 2018, concluding that too much of the advice on DB transfers it has seen was "still not of an acceptable standard".
It also voiced concern about the volumes of recommendations, with 69 per cent of clients having been recommended to transfer.
Once allowance was made for those who received triage, the proportion recommended to transfer fell to 55 per cent.
But Aegon's research showed that six in 10 (58 per cent) advisers believed the market was being harmed by the lack of an effective triage facility, with advisers unable to have a personalised discussion with a client to determine if it’s appropriate to progress to full advice, for fear that this would be classed as advice.
According to Steven Cameron, pensions director at Aegon, whilst transfers volumes have declined from a peak at the beginning of last year, demand for such advice remains high and continues to outstrip supply.
