Advising on DB to DC transfers
Advising on DB to DC transfers

The following Pensions guidance note provides comprehensive and up to date legal information covering:

  • Advising on DB to DC transfers
  • The definition of 'appropriate independent advice'
  • Who can advise on the conversion or transfer of pension benefits?
  • FCA framework for advising on the suitability of a transfer
  • Further considerations when advising in relation to enhanced transfer value (ETV) exercises
  • Recourses available to members in the event of unsuitable advice

FORTHCOMING DEVELOPMENT: On 30 July 2019 the Financial Conduct Authority (FCA) published a Consultation Paper CP19/25: Pension transfer advice: contingent charging and other proposed changes setting out its proposed measures to change how advisers manage and deliver pension transfer advice, particularly for defined benefit (DB) to defined contribution (DC) transfers. Given the advantages of DB pensions, the FCA believes that the proportion of consumers advised to transfer to DC pensions is too high and many of these transfers will not have been in consumers’ best interests. The proposals include: a ban on contingent charging (where a financial adviser receives payment only if a transfer goes ahead), except for groups of consumers with certain identifiable circumstances that mean a transfer is likely to be in their best interests; where contingent charging is permitted, a requirement for advisers to charge the same amount, in monetary terms, for advice to transfer as they charge when the advice is non-contingent; introducing a short form of ’abridged’ advice that can result in a recommendation not to transfer based on a high-level assessment of a client’s circumstances. This will fall outside the proposed ban on contingent charging and should help maintain initial access to advice The FCA is also proposing strengthening its existing requirements that