For members who are also still employees, it is also an excellent way for the adviser to understand the wider circumstances related to the member’s employment, including any access the member has to a workplace pension scheme – an area of significant focus on PS20/6.
In fact, an arrangement of this sort, can help the adviser comply with the new requirements of PS20/6.
Charging structure
With contingent charging banned from 1 October 2020, apart from in certain exceptional circumstances, advisers will be under pressure to offer competitive fees for their advice, especially if the member is paying for it (rather than the scheme sponsor).
A time consuming part of the advice process is capturing information on the scheme benefits and “learning the scheme”.
Ordinarily, trustees and scheme administrators will receive information requests from a variety of advisers, all asking for the same information in different ways.
This leads to delays in providing the information, putting pressure on the advice process and, in some cases, meaning the transfer value ceases to be guaranteed and has to be recalculated.
While the proposed standard scheme information request will help (as set out in the FCA’s GC20/1), this all adds time and cost to the advice process.
By partnering with a firm of advisers, schemes can ensure consistent and correct information is provided in a timely manner.
The adviser only needs to “learn the scheme” once and is able to spread the cost of this over multiple cases. These economies of scale should result in lower advice fees than would otherwise be the case.
In some cases, the trustees or sponsoring employer will want to provide a wider support framework.
One example is providing online education tools to the members so that they can get more information on the pros and cons of transferring and in what sort of circumstances each option might be suitable.
Details can be given of the advice process so that members are much better equipped in any subsequent conversation with the adviser, are able to provide the factfind information quickly and, importantly, understand why they are providing it.
Another example is the trustees or sponsoring employer facilitating the detailed calculations that sit behind the APTA. This would involve the secure transmission of data and working with the adviser’s chosen APTA provider to ensure the analysis is correct.
Ongoing conflicts
As well as being able to access cheaper pricing for the cost of the initial advice, partnering with a trusted adviser also brings large benefits in the thorny area of ongoing conflicts.
