This appeals process generally works well and I believe it better meets the principle for treating customers fairly. Where I still do not consider a transfer to be suitable, I address each of the client’s submission points explaining specifically and clearly the reasons why they do not alter my previous recommendation. This is almost always accepted by the client.
In other cases, it may be that a client had originally misinterpreted the meaning of a particular question on initial information gathering forms, or omitted a relevant piece of information, and I am able to reverse my previous advice in favour of transfer.
One major advantage of this approach is that it significantly reduces the risk of a complaint down the road, on the premise that either the client did not fully understand the advice or the adviser did not adequately know their customer.
Complaints could still arise where the advice was against transfer if that advice was unsuitable and a loss arises, for example in the event of premature death. Many firms have chosen to outsource this type of business and demand is likely to remain strong.
The FCA is continuing to review the market and no doubt will provide further guidance as appropriate.
Steve Patterson is managing director of Intelligent Pensions
Key points
Any assumption that giving up the security of a fixed pension for life is automatically a bad thing misses the point.
For larger cases with wealthy customers, death benefits are also often the key issue.
The implied risk and return should also take into account the client’s risk appetite.
