TECHNICAL TALK
With each partner , we go through a very thorough onboarding process , as well as conducting annual reviews to ensure our bureau partners continually meet the standards we expect . We make this information available to our Members and Clients so that they can use this to provide justification to the FCA that they have undertaken a suitable review of the business before deciding to engage as an introducer . Of course , the bureau partners also have their own requirements around engaging with introducers , and we have worked with all the partners in ensuring they have a very robust system of checks before inviting them to become a bureau partner .
A few DB specialists have left the market recently , do you think this is purely connected to the difficulty of securing PII cover ?
A major reason for this will , of course , be their inability to obtain appropriate PII cover , however , undoubtedly , there have been lots of firms who have just simply decided that advice in this area doesn ’ t fit with their future business model .
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 .
The PII market is a real issue , though , and I have some sympathy with the position in which they find themselves . PI Insurers , like any other commercial enterprise , are in business to make a profit . It doesn ’ t help when you read statements coming out of the FCA that £ 20bn of client harm has been triggered in the DB marketplace . If you compare this against a total premium book across the whole IFA sector of £ 70m per annum , you don ’ t have to be too intelligent to work out that insurers have a real problem which could threaten their very existence .
You regularly speak to advisers , pension transfer specialists and the regulator – what do you think the future looks like for this business area ?
Whist pensions freedom remains , the demand for individuals to receive advice on their options will never diminish . It would be fair to give credit where credit is due , and the recent publication of the methodology the FCA has been using with its thematic review is a real positive step . This document provides firms with a clear framework to assess their past work in this market and will allow them to make a reasonably accurate assessment of the potential risks it poses to their business . Unfortunately , this does only cover business written prior to the changes introduced on the 1st October . However , I do know that the FCA has plans to do something similar for business written since the new rules were introduced , which is another positive step for firms that remain active in this market .
Finally , what would you say to advisers who are wondering whether to remain in , or join , the DB pension transfer market ?
Embrace the guidance being provided by the FCA , constantly keep your processes under review and use third parties to check and provide opinion on your advice process . Not all DB advice is bad , and you should be clear in your mind that , in a lot of instances , your advice will be that a client should remain within their existing scheme ; don ’ t think telling a client this in anyway diminishes the expertise you have provided in reviewing this on their behalf .
You can access a breadth of guides , documentation and resources on the Pension Transfer Hub , in the Compliance area of the website . You can also find out more about the pension transfer bureau on the site , and read more about our latest bureau partner , Aviva Financial Advice , on page 28 .
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