IFAs question merit of trustees using preferred advisers

But advisers have also said trustees should be required to take more responsibility for pension transfers.

Cooke said: "I think trustees could and should do far more to prevent scams by sharing data on transfers by receiving providers or advising firms. 

“If there are a lot of requests to transfer to one provider or from one adviser, even if that is across multiple schemes, that should raise a red flag.”

Felix J Milton, chartered financial planner at Philip J Milton & Company, said fundamentally “the burden should lie on the trustee” to do adequate due diligence on the receiving scheme. 

But he added: “I do like the idea that the transfers can be stopped if a scam is suspected, but it’s a very fine line for the scheme administrators to be able to judge this and they won’t always get it right which could lead to delays in some cases and client losses through being out of the market.”

Cooke said trustees should also ask where the funds are to be invested post transfer.

“If it is in anything other than listed funds or with listed fund managers then again they should raise a flag and at least pause a transfer until additional evidence is obtained. 

“This would not affect the vast majority of transfers which will be to major providers where the trustees can be safe in the knowledge the investments will be sound.”

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