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20 April 2015

Financial advice trade association requests greater certainty for advisers under new pensions regime

The Association of Professional Financial Advisers (APFA) today called on the Financial Conduct Authority (FCA) to provide greater clarity for those advisers giving retirement planning advice under the new pension flexibilities regime.  APFA’s request came as part of their response to the FCA’s consultation on proposed changes to the pension transfer rules, for which APFA outlined their support, but only if confidence could be given to the advice community on the liability implications.

Chris Hannant, APFA Director General, said:
“We welcome the extension of the new pension flexibilities to those people currently in DB schemes and are pleased the government continues to place financial advice at the heart of consumer safeguards.

“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.

“However, the FCA’s proposed rule changes raise several key questions. The FCA should make it clear that no liability would attach to advice which, although the recommendation might be against a DB to occupational DC transfer, acts as ‘enabling’ advice regardless.

“The FCA must also give the advice industry greater certainty on where and how liability would attach for advice to ‘insistent clients’ who want to go ahead with a transfer against advice.

“While we are confident that the advice industry will continue to rise to the challenges set in motion by the government’s pension reforms, investment in the retirement advice space is unlikely to happen without greater FCA clarity on the liability implications of the new pension transfer rules; this could potentially restrict consumer access to professional advice at a time when they need it more than ever.”