RP Forum 2018: Providers should check up on DB transfer advice

Hannah Godfrey reports...

Providers have a duty of care to protect those transferring out of a pension, and must take care to check everything is being done correctly, according to LV= sales and marketing director for life and pensions Steve Lewis.

Speaking at today’s Retirement Planner Forum, Lewis said providers should act as a checkpoint in the pension transfer process.

He told delegates: “The situation we’re in today with all these regulations, with the social changes, with ordinary people coming up to the second phase of their lives – where people are going to enjoy themselves – we need to protect those people. We need to be sure everything is being done well.

“We, as a provider, need to take more care and attention to check everything is being done the right way. We have a duty of care to those clients as well as you – they’re your clients, and you give the advice, but we need to be a checkpoint in those processes to make sure it is all OK.”

In October, the Financial Conduct Authority found just 47% of the defined benefit transfers it reviewed – where a transfer recommendation was made – were suitable.

Lewis continued: “We want to deal with high-quality advisers to give wonderful solutions to people so they can achieve their dreams in their second life.”

Establishing trust

Asked about establishing trust as a business, Lewis said his one tip to advisers was that each firm should have a statement of practices and principles that sets out how, as a firm, it provides advice.

“As an example – do you advise on probability theory, or do you advise to reduce the risk of ruin,” he added. “What are your principles of advice?

“To every firm, now: if you don’t have one, it’s one to work on and develop.”