Intelligent Pensions launches DB transfer advice service

Intelligent Pensions has launched a DB pension transfer advice service, writes Carmen Reichman

Intelligent Pensions has launched a DB transfer advice service for financial advisers looking to assist clients who want to exit defined benefit pension schemes.

The service allows advisers to outsource transfers for which they would otherwise need a specialist qualification, the retirement planning firm said.

The Financial Conduct Authority has proposed all transfers from ‘safeguarded’ to ‘flexible’ pensions are carried out – or checked – by advisers with the pension transfer specialist qualification. Previously, an adviser did not require this qualification if the client intended to crystallise benefits, but it is set to be extended to all transfer activity.

Previously, an adviser did not require this qualification if the client intended to crystallise benefits, but it is set to be extended to all transfer activity.

Intelligent Pensions will offer advisers the option to stay in charge of their client’s new retirement plan or to hand responsibility for the ongoing advice to it.

The company said it had seen a 440% increase in DB transfer enquiries over the past six months and is expecting this to grow further.

Savers in defined contribution (DC) schemes were given flexible access to their pension pots by the government in April, following a comprehensive overhaul of the retirement income landscape, but this benefit was not extended to DB pensions.

Intelligent Pensions charges an initial advice and analysis fee to the client and then a set up charge to carry out the transfer.

The firm said clients will not run the risk of being double charged, as the “roles carried out by Intelligent Pensions and the referring adviser are completely separate”.

Advisers will have the option to act as investment agent and claim an ongoing fee for processing investment transactions should the client’s drawdown plan stay with Intelligent Pensions and be invested using its self-invested personal pension wrapper.

The firm also launched a ‘low cost’ drawdown plan in March allowing DC savers to transition into flexi-access drawdown with ongoing advice at an annual charge of 0.75%.

Managing director Steve Patterson (pictured) said: “Our transfer for drawdown services, whether using the pass-back or ongoing advice route, enable all advisers to get involved in this growing and important area of financial advice.

“I have no doubt the demand will come and with the new requirement for specialist advice to be taken prior to transfer, this becomes a huge opportunity for the financial services industry to start rebuilding consumer confidence.”

Specialist qualifications

The FCA is currently consulting on mandating all DB scheme members receive advice before transferring out to a more flexible arrangement.

As advice to workplace schemes is not currently regulated, the government is amending the rules to make advising on conversions or transfers of ‘safeguarded’ benefits to ‘flexible’ benefits a specified, regulated activity.

To supplement the protection, the FCA has also proposed all transfers are checked by advisers with the pension transfer specialist qualification.

Previously, an adviser did not require this qualification if the client intended to crystallise benefits, but it is set to be extended to all transfer activity.

Other firms have also stepped in to offer outsourced DB transfer solutions for advisers without the extra qualifications.

In March support services company the SimplyBiz group launched a ‘pension transfer bureau’ for advisers in partnership with Selectapension, which will carry out the advice.

Adviser trade bodyAssociation of Professional Financial Advisers claimed it is yet unclear under which circumstances advisers will need the extra ‘pension transfer specialist’ qualification when considering DB benefits.

Director general Chris Hannant said in April: “Our engagement with the FCA on this consultation leads us to conclude that, under the new pensions regime, nearly all advisers who want to continue offering retirement planning services will need a pension transfer specialist qualification.

“We need clarity as to under which precise circumstances these qualifications would be required for consideration of DB benefits.”