A leading expert on defined benefit pensions has urged the FCA to abandon its assumptions regarding DB transfers.
In a session on DB transfers at the Money Marketing Interactive conference today, CTC managing director Nigel Chambers called on the regulator to scrap its current assumption that a DB transfer will not be in the best interests of the client unless there are compelling reasons otherwise.
He said he “fundamentally disagreed” with the FCA on this point, and that regulators “need a more balance approach” to DB transfers.
Agree the time’s right to develop a truly balanced position. Pendulum may have swung too far towards caution. https://t.co/8lzp6LtUaw
— Steven Cameron (@_StevenCameron) May 18, 2017
He also criticised the assumptions behind transfer value analysis reports and hit out at pension schemes for failing to give timely or complete information to IFAs looking to conduct transfers.
“[TVAS is] assuming I buy an annuity, which is not much use. People moving out of DB schemes almost certainly want to use some kind of drawdown.”
Also speaking at the session, Hargreaves Lansdown head of pensions research Tom McPhail said he would be “absolutely astonished” if there wasn’t a regulatory backlash on DB transfers “sooner rather than later”.
Hargreaves Lansdown starts from the same point as the FCA by assuming a DB transfer would not be suitable, he said.
Chambers asked McPhail if Hargreaves’ assumption would change if the FCA changed its own starting point.
McPhail replied: “If the facts change we change our opinion.”
Totally agree with Steve Cameron
So we need to ask Tom McPhail how come Harvreaves Lansdown carried out so many DB transfers for years without detailed analysis for each client? Surely they are in the firing line as clients using their system of buying without proper advice were misguided!