Biggest advice firms commit to DB transfer market
The possibility of increased professional indemnity (PI) insurance premiums is not deterring national advice firms from offering defined benefit (DB) transfer advice, New Model Adviser has discovered.
PI insurers have become increasingly reticent to offer cover for DB transfers. Their nervousness comes in the wake of bad news regarding transfer advice suitability. Last year the Financial Conduct Authority (FCA) judged less than 50% of transfer cases to be clearly suitable in a study of 13 firms. Advice that saw British Steel workers’ pension transfers put into high charging funds through unregulated introducers then made national headlines.
Last month national advice firm Mattioli Woods announced it would cease offering DB transfer advice due to the increased cost of obtaining PI insurance and the extra resources it would have to dedicate to it.
However, many of the largest national advice names have told New Model Adviser they will remain committed to the DB transfer advice market.
Foster Denovo confirmed its intention to remain in the market. ‘We are committed to providing holistic advice to our clients, and we believe that means making sure we have qualified specialists available with the knowledge, experience and qualifications in DB transfers, should the need arise.’
Foster Denovo said its existing PI insurers are ‘comfortable’ with the processes and procedures it has in place. ‘This includes our DB pension transfer forum, which reviews each and every case to make sure the adviser has considered every option at the outset; giving further guidance if necessary. Our forum consists of experienced and qualified DB specialists, our pension transfer specialist and senior partners. Any recommendations will then also be finally assessed and approved by our appointed pension transfer specialist,’ Foster Denovo COO Helen Lovett added.
Read the full article on New Model Adviser here.