The FCA have published new rules and guidance on improving the quality of pension transfer advice in their recent policy statement PS18/20: Improving the quality of pension transfer advice.

The new rules set out how advice should be provided to consumers on pension transfers where consumers are considering giving up safeguarded benefits, primarily for transfers from defined benefit (DB) to defined contribution pension schemes.

The new rules and guidance include a variety of points, including:

  • Guidance to illustrate how firms can carry out an appropriate ‘triage’ service (an initial conversation with potential customers), without stepping across the advice boundary, by providing generic, balanced information on the merits of pension transfers.
Triage is viewed by the FCA as a useful process as it can prevent consumers from paying advice charges unnecessarily. However, it has been found that some forms of triage were straying into the provision of personal recommendations, rather than generic information.

PS18/20 therefore seeks to clarify how firms can provide an appropriate triage service without stepping across the advice boundary.

View PS18/20: Improving the quality of pension transfer advice

In summary, triage should be educational and provide generic, balanced information on the advantages and disadvantages of a pension transfer. If an adviser makes a reference about how a client’s personal circumstances may influence advice to transfer, then it is likely that they are providing advice

The new guidance on triage comes into force on 1 January 2019. This means pension transfer specialists will require a compliant triage process by the New Year if they are to comply with new FCA guidance.

In order to help with this, we have linked with two separate triage processes with the aim to make you aware of the services on offer: Money Alive and Expert Pensions. In addition, we have created our own triage process consisting of an introductory flowchart, an informative video/podcast and an attitude to transfer risk questionnaire.

More information regarding each element will be announced soon, and we would love to know your thoughts and feedback after the announcement. In the meantime, if you have any thoughts or ideas regarding triage, please don’t hesitate to get in touch.

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