Cashflow planning software provider CashCalc is withdrawing its transfer value comparator tool, due to low demand amid a shrinking pension transfer advice market.
The provider introduced the TVC in October in response to new rules from the Financial Conduct Authority, which had made it a requirement for defined benefit transfers.
But almost a year later the tool accounted for only 2 per cent of CashCalc's usage but was taking over 50 per cent of the development team's time in maintaining it.
The TVC shows in graphical form the transfer value offered by the defined benefit scheme and the estimated value needed to replace the income in a defined contribution environment.
Ray Adams, director and chartered financial planner at CashCalc, explained the decision for launching the tool was due to the fact that several providers had decided to exit the market following the new rules.
He said: “What it meant is that the available providers of an analysis tool massively shrunk to only two providers in the UK.
"With my adviser hat on I didn’t think that was good because we ultimately didn’t have much choice, so decided to launch a TVC tool to give our profession more choice.”
Mr Adams noted that during the past year, the FCA has done further reviews into the DB transfer market, and the professional indemnity market has severely contracted.
Mr Adams himself, who is also a director of Niche IFA, said he was able to secure PI cover this year at “eye-watering” conditions.
He said: “What we’re seeing now is that where there were 3,000 advisers in the country able to give TVC/DB advice, that is shrinking day-by-day.
“It’s my personal view that it’s likely to drop to less than 500 advisers in this country. So I’ve taken the decision to actually withdraw the TVC tool from our available suite.”
The FCA expects the advice market for pension transfers to shrink even further after proposing a ban on contingent charging in July.
The new rules came after the watchdog’s survey of 3,015 firms between April 2015 and September 2018, which found too much of the advice on DB transfers was "still not of an acceptable standard”.
CashCalc currently has 12,000 registered account holders, an increase of 9,000 when compared with a year ago, while the funds under calculation doubled from £50bn to £100bn.
Mr Adams added: “I think we need to be putting our efforts and development into what’s being used.
"So by freeing up those developers from working on a tool which only has 2 per cent use, we can now really ramp up the development of those other ones, and we’re currently working on some real nice enhancements to the cashflow and onboarding tools.”
CashCalc has removed the TVC tool for new users with immediate effect.
However, anyone who currently has access to it will still be able to use it until the end of 2019, meaning those who have ongoing cases will still have access for several more months for them to be completed, the provider stated.