Abridged advice has not reduced the number of people who want a defined benefit transfer but has helped advisers put their clients in a more informed position before deciding whether to proceed, according to this week’s podcast guests.
Appearing on the FTAdviser podcast, Fiona Tait, technical director at Intelligent Pensions, said although her firm is doing less transfer work then they were before, she has yet to come across a client who has gone through the abridged advice process who has then not gone on to full advice.
Abridged advice sits in between triage and full pension transfer advice but can only result in a personal recommendation to not transfer out of a defined benefit scheme.
First mooted by the Financial Conduct Authority in July 2019, abridged advice begins with an introductory chat with the client, where the adviser can get some high-level information about their circumstances in order to determine that they are not a viable candidate for a transfer.
But there were concerns from the industry about whether it would work when it first launched.
Tait said when deciding whether abridged advice has been successful, it depends on what a firm was trying to achieve.
She said: “I think it has put clients in a more informed position and we've had better conversations with clients as a result of average advice.
“But what it hasn't done is it hasn't reduced the number of people who wanted to transfer. But I think one of the reasons for that is that because of all the protections that are in place, now when somebody comes to us and is willing to pay for transfer advice, they really do have a good reason to go ahead otherwise they wouldn't have gotten that far.”
Also appearing on the podcast, Simon Harrington, a senior policy adviser at Pimfa, said abridged advice is a lot closer to full advice then it was originally given credit for.
Harrington said: “One of the key questions that I think we would have for the regulator is the percentage of cases where an unclear result from abridged advice has proceeded to full advice where the individual has actually been invited to transfer or whether or not it's actually fallen by the wayside.”
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amy.austin@ft.com