The Financial Conduct Authority has today published final rules and guidance from its consultation on improving the quality of pension transfer advice.

I was going to open by commenting that it’s the time of year when the budget rumour mill starts kicking into action, but of course this will only be the second Autumn Budget, so we’re more accustom to these things happening at the start of the year.

Over the last few weeks I’ve had a much higher than usual number of ‘interesting’ transfer out requests land on my desk. Maybe it’s the hot weather getting to people, but it’s curious how these things seem to be like buses – nothing for ages then all at once.

Transfers out to unknown schemes can cause providers a lot of headaches, and we’re largely in a no-win situation. There’s a lot of extra work to be done and at the end of it we either end up losing a customer or having one who’s a bit annoyed at having to stay put.

The recent Ombudsman ruling, Mr N v The Police Pension Scheme, shows the importance of completing appropriate due diligence for the transferring scheme – and the harsh consequences of getting it wrong (the scheme has been ordered to reinstate the member’s accrued benefits).



The most common type of “unknown” scheme we get requests to transfer to, are SSAS. A transfer to a scheme with a known SSAS provider involved can be fairly straightforward, but there are many DIY schemes with no other parties taking responsibilities. In most cases the individual hasn’t just taken it upon themselves to open a SSAS, there’s someone in the back ground recommending the course of action. Now this could be for legitimate planning purposes, or for something less above board.

We also get cases where our gut feel isn’t necessarily that someone is trying to pull a fast one on the client, but rather there’s just a handful of people involved who don’t understand pensions, so there’s a high risk of the scheme inadvertently falling foul of HMRC rules. On one of our recent cases we had two parties both saying the other was the Scheme Administrator, and denying it was them – which begs the question who’s reporting anything to HMRC?

As well as looking at the scheme and any other parties involved in the transfer request, it’s also important to look at the member’s history. Anyone washing funds in and out of a pension in a short space of time can be a red flag unless there is good cause.

The Pension Scams Industry Group (PSIG) have recently updated their Code of Good Practice, which gives some great pointers as to what providers should be looking for and questions to ask.

If you are advising on a transfer to a less well known scheme then you should be prepared for a few extra questions, and plan time in for the provider to complete their checks. On the plus side, the fact that there’s an FCA regulated adviser advising will add weight to the case for transfer.

Lisa Webster is technical resources consultant at AJ Bell

When the pension freedoms were introduced it meant radical changes in a short space of time, with providers scurrying round to be ready and the FCA playing catch-up after the event – most recently in the form of the Retirement Outcomes Review final report.

In the run-up to pension freedoms people seemed to be speaking about pensions in a different way. There was new excitement over the removal of the need to buy an annuity (even though this had been the case for some time already).

Many years ago (as some of the best stories begin) when I was working for Winterthur Life, I undertook a series of talks around the UK.

A pensions business is immediately halting advice on DB pensions transfers, following discussions with the regulator.

Around 80,000 transfers out of defined benefit pension schemes were made in the last year, a regulator has estimated.

A common governance body for pension transfers is needed to overcome the problems that currently exist, as the industry is “doing spectacularly badly”.

Origo, an e-commerce standards and services body for financial services, has gone live with what it says is the industry's first automated system for re-registration of pension assets.