DB scheme trustees required to check up on adviser transfer permissions

Kim Kaveh reports...

Defined benefit (DB) trustees are now required to contact financial advice firms to ensure staff providing advice to members are fully compliant before carrying out a transfer exercise.

The Pensions Regulator’s (TPR) updated DB to defined contribution (DC) transfers and conversions guidance document, amended last week, revealed the new requirement. It also said trustees have the option to check an appropriate third-party directory to obtain the relevant information.

Scheme trustees are already required to check if the adviser has the correct permission to carry out regulated activity in the Financial Conduct Authority’s (FCA) register, after it gets confirmation that appropriate independent advice has been given.

With the introduction of the Senior Managers and Certification Regime (SMCR) for financial advisers from 9 December, however, trustees will need to take extra steps to confirm advisers’ permissions.

Under the terms of the SMCR, only senior managers and selected other roles will need to be approved, while those carrying out customer-facing roles will be subject to a certification regime carried out by their firm and most will not appear on the FCA register.

TPR’s updated guidance noted that trustees should continue to check the register for firm details.

The FCA will next year release a directory which will contain data on certified individuals. In its policy statement published in March, the FCA revealed that adviser firms have until December 2020 to submit data for the new directory.