30 Jan Rosalind Connor on the Powers of Trustee Boards in Opposing Suspicious Transfer Requests
The Government and regulators have been urged to strengthen the powers of trustee boards in opposing suspicious transfer requests, as an alert from the Financial Conduct Authority warned that some advisers are not carrying out proper due diligence on receiving scheme investments.
In its supervisory work, the FCA found that a small number of firms had concentrated on generic critical yield analysis to recommend or advise against a transfer, without considering whether the investments of the receiving scheme would introduce greater risk of losing those benefits.
Partner Rosalind Connor suggested that the statutory right to transfer should be reconsidered:
“If you’re coming out of a defined benefit scheme into a defined contribution one you need to get advice, but you don’t need to follow that advice. The fundamental problem here is that there is a law that says you have a right to transfer.”
The government has begun to look at limiting the statutory right in its consultation on scams, launched in December last year. Rosalind said she sympathised with advisers, who are faced with a more complex due diligence process than ever before.
Read the full article in Pensions Expert here.