TECHNICAL TALK
INSIDE THE DB PENSION TRANSFER MARKET
It ’ s hard to think of a topic that has been as consistently in news headlines , both due to the regulator ’ s gaze and advisers ’ consciousness , as DB pension transfers . We often say that , whether or not you have decided to advise in this market , it ’ s a business area which cannot be ignored . Someone at the sharp end of pension transfer advice – not only overseeing our own services , including the creation of the pension transfer bureau , but also regularly speaking to our Member and Client Firms , DB advice specialists and the FCA – is Gary Kershaw , Compliance Director of SimplyBiz . We spoke to Gary to get his insight on the current state of the market , and what ’ s next for DB pension transfers .
The DB pension transfer market seems to be in a
situation where consumer demand is increasing but the number of advisers able – and willing – to conduct this type of business is shrinking . How do you think we ’ ve reached this point ? Not wishing to disagree with you immediately , but there probably isn ’ t a lot of evidence of increased consumer demand . What we do have , however , is very clear evidence that the supply of advice in this sector is diminishing fast , and this can therefore give the appearance that demand is on the increase . There has been quite a lot of information released by the FCA itself which has highlighted the large number of firms that have given up their permissions in the 12 months , and this has had an impact on those firms that have remained in the market .
The SimplyBiz Group has a DB pension transfer bureau – why did you set up this service ? And what do you look for in bureau partners ?
Even before the FCA commenced its review in the sector , it was clear from the data we hold on our firms that there was a massive gap between the firms that held permissions and those that didn ’ t . At the time we used to have a ‘ specialist firms register ’ which we made available to firms which may be interested in making referrals . The register didn ’ t just highlight firms who held DB permissions , but also covered other specialist areas , like equity release and long-term care . We ’ re committed to supporting advisers and enabling them to deliver the best advice and outcomes to their clients , whatever their needs , and understand that sometimes the best way to do this is by outsourcing to a specialist . Whilst this provided invaluable assistance for firms , the introduction of more stringent rules regarding the requirement for firms to carry out appropriate due diligence on its third-party suppliers led us to decide that we needed to take a more formal approach . When building the bureau , we initially looked for partners whose sole business operation was focussed on giving advice in this area . We took this stance in the belief that , as it was their sole focus , it was likely to lead us to firms with very robust systems and controls around what is a complex area of advice .
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