Quilter calls for schemes to reveal transfers amber flag reasons

Quilter calls for schemes to reveal transfers amber flag reasons

Quilter has called on the Department for Work and Pensions to require pension schemes to inform clients of the reason for an amber flag being raised.

According to Freedom of Information request by Quilter to the Money and Pensions Service (Maps), during the first year of the new pension transfer regulations, four out of five (80 per cent) of all amber flags were raised for either an unknown reason or for a potentially low risk transfer relating to overseas investments.

The FOI found that of the 8,395 MoneyHelper Pension Safeguarding Guidance (PSG) sessions that were conducted since the regulations were established in November 2021, nearly half (44 per cent or 3,670) were conducted for an ‘unknown’ reason.

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Meanwhile, more than a third (36 per cent or 3,019) were conducted after a flag was raised on potentially low-risk transfers relating to overseas investments.

Reason for amber flag

Number of amber flags raised (Dec 21-October 22)

Complex investment structure


Evidence provided is not genuine


High risk/unregulated investments


High volume to the same scheme


High volume with the same financial adviser


Overseas investments


Unclear/high fees






Quilter asked for clarification on whether Maps would ever consider requiring confirmation of the specific reason why an amber flag was raised.

It argued that making this a requirement of booking a guidance session would help improve both the customer’s understanding as well as the data collection on the reasons for referral.

Jon Greer, head of retirement policy at Quilter, said as an industry, “we are all too aware” of the ongoing unintended issues and delays advisers and their clients are facing as a result of the pension transfer regulations, yet so far there has been little done to improve the situation.

“The current lack of clarity being provided to scheme members in terms of the reason for an amber flag being raised on their pension transfer can lead to customer dissatisfaction and disengagement with MoneyHelper sessions, particularly as the growing number of people needing guidance sessions is resulting in delays in receiving one,” he said.

“As such, Quilter is calling on the DWP to consider making it an explicit legislative requirement for all pensions schemes to provide clear and accurate information to customers on the reason an amber flag has been raised within its upcoming review.”

Greer said if this requirement were to be brought into play, not only could there be an improvement in customer understanding and receptiveness to MoneyHelper guidance sessions, but there could also be a significant shift in the effectiveness of the current data collection by reducing the number of ‘unknowns’ and gaining a clearer picture of the challenges facing the pension transfer landscape.

However, in response, Maps said: “There is no requirement within the regulations for pension schemes to inform their members which flag(s) has been identified during their due diligence process. The only requirement is that they tell their members if a flag(s) is identified.

“At the request of DWP we will continue to record if our customers have been informed of the flag identified by their scheme, but we do not anticipate the number of unknown flags to change significantly. This has no impact on the guidance session delivered to our customer.”