12th March 2018 Rosalind Connor comments in Money Marketing on scheme rules holding back pension transfer advice
Pension trustees are voicing increased concerns that scheme rules are stopping them signposting financial advice to members.
Trustees fear that angry members who believe that they have had bad advice will take them to court and that scheme rules are often written in such a way that they do not allow trustees to provide financial guidance or education to members.
Rosalind Connor commented that advisers have more to fear from transfers going wrong than trustees do. This is because members will ultimately make a claim against the adviser rather than the trustee.
She said: “The adviser’s only defence is either they did not know about a risk at the time of transfer so could not tell the client about it, or that they thought a risk was so unlikely to materialise they did not mention it. These are two difficult defences to make with hindsight.
“I can understand why financial advisers get scared [on transfers] as it is irreversible, unlike other financial decisions where you can recoup your losses somewhat.”
Rosalind added: “Part of the point about transfer out is that one person’s reasons for transferring out are different from another’s. This is why appointing an adviser can be a complicated process.
“If trustees are worried about signposting an adviser they could say ‘this is the adviser we have selected but you can choose your own here at the unbiased website’”.
Read Rosalind’s comments in Money Marketing here
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