It comes as research published by the pensions provider today (August 13) suggested half of advisers advising defined benefit members were concerned a ban on contingent charging would contribute to the market's growing advice gap.
In a consultation paper out in July the Financial Conduct Authority proposed a ban on contingent charging, with some exceptions, after its research found the proportion of consumers advised to transfer out of their DB pensions was too high.
It also proposed to introduce 'abridged advice', a lighter form of pension transfer advice which cannot recommend a client to transfer.
In a survey of 211 IFAs Aegon found 58 per cent of advisers worried a lack of a triage facility was harming the market, after the FCA in its latest paper confirmed it was unable to allow a more personalised approach to pre-advice triage on DB transfers as this would be classed as regulated advice.
Aegon has warned this, in addition to the contingent charging ban, would place "considerable pressure" on the FCA's vision for abridged advice.
Abridged advice is expected to consist of an introductory chat with the client, where the adviser gets some high-level information about their circumstances and determines that the consumer isn’t a viable candidate for a DB transfer.
The adviser is then expected to conduct a full fact-find and risk assessment, including an assessment of the client’s attitude to transfer risk in line with the FCA’s guidance on assessing suitability.
The result of abridged advice can only ever be to not transfer and means that some consumers may receive a personal recommendation not to transfer without an adviser having to collect detailed scheme data, undertake an appropriate transfer analysis or provide a transfer value comparator.
Concerns have been raised by advisers that the new advice model will leave them more exposed to complaints and that they won’t be able to offer the service at the low cost the regulator expects.
Some adviser have also warned the introduction of abridged advice will create confusion for consumers unable to differentiate between the many types of advice now on offer.
But Steven Cameron, pensions director at Aegon, said the key may be to make this new form of abridged advice "workable" for clients.
He said: "Firms may offer this short form of advice and while it can only produce a recommendation not to transfer, it may help weed out those for whom transferring is unlikely to be suitable, saving them money and freeing up adviser time to spend on providing full advice to those more likely to benefit from transferring.
"We are keen to work with adviser firms to explore this approach including how to make it as streamlined and cost-effective as possible."
The FCA believes that many of the transfers that have taken place will not have been in the customer's best interests and instead would prefer advisers to work on the assumption that no transfer is needed.
Under its proposals, in the minority of cases where contingent charging is permitted advice firms will have to charge the same amount, in monetary terms, for advice to transfer as they charge when the advice is non-contingent.
Aegon found 51 per cent of respondents to its survey believed the regulator's proposals would see demand for their advice fall, with only 21 per cent confident a ban would not exasperate the advice gap.
Mr Cameron said: "Contingent charging for DB advice has proven particularly contentious. Some argue it creates unmanageable conflicts of interest, while others point to a ban making advice for some individuals unaffordable."
Alistair Cunningham, financial planning director at Wingate Financial Planning, said he felt abridged advice proposals made sense only when a client was also getting holistic advice.
He said: "It is useful to simplify the general axiom that most people should not transfer from a defined benefit scheme.
"I do not see it as a viable solution to expedite other areas of advice, and would be very concerned if it was used as method to foist product upon consumers.
"I see shorthand like 'advice gap' as being a lazy way of whittling way rules which are ultimately there for consumer protection."
rachel.mortimer@ft.com
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