“I think this is marked change from previous years, where clients were perhaps less aware and were transferring because it was in the news about record high CETVs.”
Last year marked the first full year of the contingent charging ban and clients wishing to transfer now had to pay for advice whether the transfer went ahead or not.
A new type of ‘abridged’ advice was also introduced to try to avoid clients having to pay large sums for full-blown transfer advice when it was clear that there was unlikely to be a recommendation to transfer.
In November, rules came into force which removed the statutory right to transfer.
Trustees are now expected to block transfers if certain ‘red flags’ are present, such as individuals being pressured to transfer.
In addition, they can raise an ‘amber flag’ if they suspect a potential scam, which will mean the member will have to provide evidence they have taken specific scam guidance from the Money and Pensions Service before they are allowed to transfer.
But Webb said this could see some transfers delayed.
“There is a real risk that if pension schemes want to cover themselves they will be tempted to recommend large numbers of people go for anti-scam interviews and this could lead to a delay before the transfer can go ahead,” he said.
This potential problem will then be added to the fact that the combined effect of new DB rules, plus the continuing challenge of accessing PI cover, has led to a further decline in the supply of transfer advice.
Webb said: “Between 2018 and the start of 2021 the number of firms with permissions to provide DB transfer advice had already fallen from around 3,000 to around 1,500.
“As a result of these changes, individual members are finding it increasingly difficult to source affordable advice, and growing numbers of pension schemes are appointing advisers to work closely with individual schemes and their members on transfers and wider pension advice.”
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