‘Overwhelmed’ Selectapension partner exits DB transfer advice

November 10th, 2017

‘Overwhelmed’ by demand, Selectapension’s outsourced advice partner has decided to call time on defined benefit (DB) pension transfers.

The decision comes five months after a Financial Conduct Authority (FCA) visit led it to suspend its service, which offered DB transfer advice to other firms through an outsourced model.

CFP Management Limited, the principal of Selectapension Bureau Services, was receiving as many as 60 transfer requests a week, according to Selectapension national accounts director Peter Bradshaw.

‘It was basically overwhelmed. When you have one company relied upon to service all that [demand] and complete a review, it became difficult to manage resources and meet people’s expectations,’ he said.

In June Selectapension said it hoped to be able to offer DB transfer advice through CFP Management after the regulator completed a review of the business and its processes.

‘Full permissions remain in place while CFP Management Limited are working with the regulator on their ongoing review,’ a spokeswoman told New Model Adviser® at the time.

But it has now agreed to an FCA permission restriction which means it cannot carry out any new DB transfers.

‘With effect from 31 October 2017, the firm shall cease to provide advice in relation to the transfer, or conversion, of safeguarded benefits under a pension scheme to flexible benefits,’ a note on CFP Management’s FCA Register entry says.

Bradshaw said the transfer bureau will now write to clients informing them the firm will not be able to provide transfer advice for any new cases.

He also suggested the regulator wanted to stop firms advising on DB transfers in isolation from a client’s entire financial situation.

‘With its guidance the FCA is very much focused on holistic planning, not just the transfer itself in isolation, it was looking beyond the transfer to ensure there was a sufficient level of income in retirement. There was also this point around separating an objective from a need. You might have an objective for example to plan for inheritance tax, but this could be trumped by a greater need for retirement income.’

Andy McCabe, managing director of Selectapension Bureau Services, said: ‘We regret the inconvenience this has caused to our mutual clients and wish CFP Management Limited every success with its future endeavours.’

CFP’s restriction means Selectapension will not be providing a DB transfer advice service. However, Bradshaw added Selectapension will continue to offer transfer value analysis reports.

The FCA declined to comment.


Source: New Model Adviser