Defined Benefit  

Sanlam asks network to stop DB transfers

Sanlam asks network to stop DB transfers

Sanlam has asked advisers in its network to stop doing defined benefit transfer work because it was difficult to oversee the "various processes" administered by its members. 

The advice firm has instead said it would prefer defined benefit transfers to be managed by its in-house advisers or for network members to use the Unbiased service. 

Sanlam is the latest firm to have stepped away from the defined benefit transfer market, with the sector having recently received increased scrutiny from the Financial Conduct Authority. 

Following a survey of 3,015 firms between April 2015 and September 2018 the regulator voiced concern about the volumes of recommendations in the market, with 69 per cent of clients having been recommended to transfer despite the watchdog's firm stance that this is likely to be unsuitable for most clients 

John White, chief executive of Sanlam’s wealth division said: "We took the proactive decision to halt DB transfers amongst our adviser network to ensure greater consistency of advice for the end client.

"It is difficult for us to oversee the various processes administered by our network members and by managing DB transfers through our in-house advisers, we can provide a clearer and more consistent approach.

"Our network members also have the freedom to guide their clients using Unbiased, where appropriate."

Earlier this month national IFA firm LEBC agreed to give up its defined benefit pension transfer permissions following a review of its advice by the FCA. 

The adviser ceased work in the sector voluntarily and its majority shareholder BP Marsh & Partners said its officials were working closely with LEBC's management to return the firm to “the position it was in before the FCA review”.

In June the regulator concluded too much of the advice on DB transfers it had seen was "still not of an acceptable standard", with an average transfer advice value of £352,303.

This was equivalent to a total value advised on of £82.8bn, including both actual transfers and advice against it.

rachel.mortimer@ft.com 

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