New consumer guide to launch for DB pensions transfers
16 April 2019
09 May 2019
Personal Finance Society
The Pensions Advice Taskforce is to launch a new consumer guide for Defined Benefit (DB) Pension Transfers, as part of a sector wide collaboration, to help the public better understand what to expect from regulated financial advice.
The guide will be called the pension transfer ‘Gold Standard’ linked to an adviser code based on nine principles underpinning good practice when giving pension transfer advice. Advisers who adopt the code will be required to display the Gold Standard badge.
The Pensions Advice Taskforce is an industry-wide representative body whose purpose is to enhance consumer awareness and protection in areas of complex pension advice. It also aims to align standards across the sector and ultimately help to protect the reputation of the majority operating in the profession.
It was established by the Personal Finance Society in response to the stress, uncertainty and potential financial loss to individuals arising from the closure of the British Steel Pension Scheme in early 2018 and growing public statements of concern regarding some adviser practices.
The Taskforce comprises representatives of scheme trustees, financial advisers, pension providers, compliance consultants and PI insurers, as well as the newly launched Money and Pensions Service, which brings together the Money Advice Service, The Pensions Advisory Service and Pension Wise.
The Gold Standard badge is the first initiative the Taskforce has delivered, underpinning the delivery of sound, ethical financial advice with respect to Safeguarded and Defined Benefit pensions. The Taskforce is clear that its success will ultimately derive not from establishing yet another advice standard (voluntary or otherwise) but how it helps consumers understand what is involved in the pension transfer advice process, what ‘good looks like’ and where to find it.
One of the requirements of firms wishing to adopt the Gold Standard is that they have PI insurance which meets FCA threshold conditions, and whilst the Personal Finance Society acknowledges the timing of the recent increases in the Ombudsmen’s compensation limits isn’t ideal, it anticipates adoption of the Gold Standard by firms will be viewed positively by the PI market.
Keith Richards, CEO of the Personal Finance Society, said: “In an often-cynical marketplace, perpetuated by a minority who can impact the perception and reputation of the majority, the Pension Transfer Gold Standard is about raising consumer awareness and redressing the knowledge imbalance between firms giving advice and consumers seeking and taking it, especially those who are mandated through pension freedoms. It is important that consumers are initially guided to make an informed decision before engaging a financial adviser for the first time, which we believe will also better support financial advisers giving advice.
“Crucially, the Gold Standard will allow advisers to align with initial guidance provided by Pension Wise and included with initial valuations from Scheme trustees. An adviser or firm that adopts the Gold Standard is demonstrating that they are prepared to go the extra mile in order to foster trust in our profession whilst also addressing the concerns raised by the Work and Pensions Select Committee
Consumers will be able to identify advice firms that have adopted the Standard by visiting the Retirement Directory on the Money Advice Service website which will be supported by the PFS and incorporated within its own directory.
John Govett, CEO of the Money and Pensions Service said: "We welcome the Pension Transfer Gold Standard as a great industry initiative designed to help consumers find the specialist advice they need when considering whether to transfer safeguarded pension benefits. The Single Financial Guidance Body supports industry-led schemes that seek to safeguard consumers and we look forward to working with advisers, firms and their professional bodies to ensure that customers feel confident in seeking the help they need."
More information about the PFS’s Pensions Advice Taskforce can be found here: www.thepfs.org/ptgs.
This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.