Defined Benefit  

Tenet has no plans to leave DB transfer market

Tenet has no plans to leave DB transfer market

Tenet has backed its advisers to continue doing defined benefit transfer work as long as members follow the network's pre-assessment criteria.

Speaking with FTAdviser Caroline Bradley, risk and regulatory director at Tenet, said the network was "absolutely" still in business to compete in the defined benefit market, an area which has come under increased scrutiny by the regulator in recent months.

Ms Bradley said Tenet assesses each piece of advice pre-sale and it was comfortable with its advisers continuing to operate in the specialist area provided they satisfy this assessment. 

She said: "Our advisers would be qualified themselves and then we have a separately qualified pension transfer specialist.

"So any client that comes to Tenet for a defined benefit transfer will get that second layer of oversight to make sure it is suitable. We have had that at Tenet for years.

"What we don’t want is advisers who just do one defined benefit every now and again, so we’re tending to find we have less advisers doing defined benefit but those that do are more specialist in that area.

"And we are quite comfortable that they carry on doing that as long as they meet with our pre-sale assessments and strict criteria." 

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

The advice firm 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. 

Ms Bradley said: "It [defined benefit] is complex advice, it’s the one advice event which is irreversible and so it’s not an area that I think people should dabble in.

"I think if they do defined benefit advice it should be in an area where they are able to demonstrate ongoing confidence." 

The Financial Conduct Authority's latest move in the pension transfer sector has featured a consultation on advice and proposals to ban contingent charging, in addition to sending firms warning letters and conducting market-wide visits.  

The regulator has always maintained advice to transfer out of a defined benefit scheme is likely to be unsuitable for most consumers, but in a survey of 3,015 firms between April 2015 and September 2018 it found 69 per cent of clients had been recommended to transfer out of their scheme.

The FCA has since issued a number of warnings to advice firms and is in the process of banning contingent charging on DB transfers to 'prevent harm', alongside introducing a new form of abridged advice, which would make it easier to advise people to not transfer.

rachel.mortimer@ft.com 

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