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Defined Benefit Pensions: Always seek professional advice before transferring your pension out

Ross Altmann, the former Pensions Minister has challenged the Financial Conduct Authority to think differently in its approach to protecting people from rogue financial advisors and ill-advised decision making.

The six million people in defined benefit pension schemes who could be enticed by the high transfer values on offer are causing much consternation among parliamentarians, the regulator and financial advisers.

The FCA has found a significant proportion of transfer advice to be unsuitable or questionable. Its latest consultation suggests big changes to the way such transfers operate. It is most unfortunate that rogue firms, or unqualified, unregulated lead generators, have damaged the reputation of the advice industry. As the FCA rightly acknowledges, advice is a valuable service, but it is also important that quality and professionalism meet expectations.

Ros writes: Everyone thinking of transferring should be required to take independent guidance first. This would help advisers who “triage” potential clients by means of generic “advice”. The FCA has warned that this may too easily stray into actual advice. Even deciding against accepting a client could be construed as advice against transferring. By the same token, accepting them might be indicative of a conclusion that the transfer is sensible. Separating the adviser from such a pre-selection process is much safer.

You can read Ros’s full article here: Ros Altmann Moneymarketing article

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