How is defined benefit pension transfer advice changing?
The regulatory landscape is constantly changing. This autumn, the blot on the horizon is regulatory policy statement 20/6, which essentially seeks to overhaul advice on defined benefit (DB) pensions – also known as final salary pensions – with the changes and a fee increase coming into force from Thursday 1 October 2020.
The regulator’s actions are based on their very real concerns surrounding the general standard of advice being given in this area and the demographic to whom this advice is delivered – British Steel being a case in point. Their method of addressing this is to enforce a more robust basic standard of DB pension advice and increase the cost associated with this, in order to effectively “price out” people who will rely on their final salary pension to fund their retirement as well as those who do not have the “cash on the hip” to pay direct fees.
As one of the first financial firms to be awarded the pension transfer gold standard, we pride ourselves on delivering excellent service rather than simply meeting the basic required industry standard. So we are making a very small number of process changes compared to many of our peers to incorporate the new rules – which is great news – and from which we take comfort.
Unfortunately, however, although our service and its modular structure will be familiar, our fees will have to increase not insignificantly for new DB transfer enquiries from Thursday 1 October 2020. The missive from the regulator is that advice on DB transfers has to be the singularly most expensive retirement planning service that a firm offers. It should not be on a par with, or cheaper than, other retirement planning strategies.
If you are interested in a review of your existing DB scheme by one of our suitably qualified advisers, you can read more about our process and current charging structure on our website by clicking here.
Alternatively, should you have any queries please get in touch.