Financial advisers (IFAs) will be wary of helping members transfer from defined benefit (DB) to defined contribution (DC) arrangements due to fears they will be accused of mis-selling, warn consultants.
Speaking at Pensions & Benefits UK Barnett Waddingham head of pensions research Tyron Potts said the gravity of advising on transfers was not lost on IFAs.
The fact there was no going back once a transfer went through probably added to IFAs' concerns as did the stringent guidance from regulators.
The FCA and the Pensions Regulator say a transfer must be in the member's best interests.
Potts said: "Anecdotally advisers are treading very carefully. We have heard stories of IFAs who are considering asking members who want to transfer to write in their own hand that they are transferring in spite of the advice received. Down the line IFAs are at the risk of criticism."
Potts added the authorities were in a challenging position. "It's difficult to know what the FCA could do to help IFAs. I don't think they want to encourage IFAs to give positive recommendations to transfer."
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