What advisers are getting right and wrong about DB transfers


Advisers are continuing to make basic errors in their record keeping which needs to be addressed before they can improve their defined benefit transfer advice, according to regulatory expert Rory Percival.

Speaking on the FTAdviser Podcast this week, Mr Percival said poor record keeping continues to be a real issue and adviser firms should turn to the FCA’s newly published guidance on DB transfer advice to address bad practice.

The regulator published its 93-page document, Guidance consultation: Advising on pension transfers, alongside its final rules for DB transfer advice last month (June 5) to help firms identify weaknesses in their existing advice process.

Mr Percival said: “The guidance consultation is an absolute must read for all pension transfer specialists and non-PTS's will also benefit from some sections of it as well.

“It is a very clear steer from the FCA on what good advice looks like in this market and what bad advice looks like.”

Mr Percival pointed out that one area which requires a lot of improvement from advisers is their fact-finding process.

He said: “I have been in a lot of roundtables with the FCA over the past two to three years on DB transfers and they have said the same thing in every single one, which is that fairly basic errors occurring in fact finding was quite common.

“This is frankly quite shocking because DB transfers is a high risk part of the market and advisers aren’t recording or getting adequate information from clients.”

Also appearing on the podcast, Alistair Cunningham, financial planning director at Wingate Financial Planning, agreed improvement was need in this area.

Mr Cunningham said: “There are a number of firms that think they are fine and are doing everything correctly and that in fact the problem lies with someone else, when actually [FCA data] shows the problem is more widespread than people think.”

To listen to the full podcast click play on the video above or listen on Apple Podcasts, Spotify, Stitcher or Acast.


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