Defined Benefits – Pension Advice
The FCA & Adviser Insurance Position
In early 2018 the Financial Conduct Authority stated that they believe that in the case of most clients, the assumption should be that retaining their Defined Benefit scheme with guarantees, or those with “safeguarded” benefits, is the best advice solution.
The FCA believes that any starting point should be : –
The client outcome at retirement,
The objectives of the client overall, and
The DB schemes potential in meeting those objectives or assisting in meeting the outcomes.
The FCA does not like the separation of advice of the ‘transfer’ from the transfer itself, including any ‘investment’ in the new pension, as they believe that this results in poor outcomes for clients.
In practice, “signing off” of Defined Benefit pension transfers has led to numerous claims against adviser firms, which has led to the largest Public Indemnity (PI) insurer going into liquidation and also scrutiny by MPs at parliament throughout 2018, 2019 and 2020.
The FCA has also changed the amount of compensation available through the FOS and implemented full reviews of firms in 2019 and 2020. This has led to some adviser firms now being refused PI cover and going out of business, along with restrictions in the cover where it is provided.
Aisa Financial Planning Ltd has the necessary FCA permissions to provide advice to clients with Defined Benefits (final salary) schemes and those with ‘safeguarded’ benefits in excess of £30,000.
We follow FCA Best Practice and always strive to achieve positive outcomes for all the clients we work with. We have always believed that a ‘Sign Off’ is not in a client’s best interests and as such, we do not provide ‘Sign Offs’. We are a Chartered Financial Planning firm and we see our role as assisting clients to be in the best position they can be through sound advice and long term planning.
To achieve this, we work with our clients and guide them where they require our knowledge and expertise.
What We Will Do