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Defined Benefit (DB) transfers advice support

By Chris McGreavey, Policy Manager | 9th February 2021

The FCA has published the DB advice assessment tool they used to conduct their recent pension transfer reviews, and recommends firms use it to understand how suitability should be assessed in this area of high regulatory scrutiny.

The FCA’s concerns about the standards of advice in the DB pension transfer market are well documented. It has been, and remains, an area of focus for the regulator.

Developed and used by the FCA during the latest phase in their review of assessing the suitability of DB transfer advice, the Defined Benefit Advice Assessment Tool (DBAAT), together with a suite of 9 training videos and a 104-page instruction manual, is now being made available by the FCA in a bid to improve the standards of advice in this area.  Firms can access the DBAAT through the FCA website and can use it subject to a Licensing Agreement.

The tool is based on pre-October 2020 rules only. It therefore has limitations for use in assessing the suitability of new advice as it does not incorporate the rule changes that have come into force since 1 October 2020. These include, amongst other measures, the ban on contingent charging, carve-outs, updated disclosure requirements, the introduction of abridged advice, evidencing of client understanding and the need to consider a workplace pension scheme as a destination for a transfer.

However, firms may find the tool helpful in the event of a complaint regarding pre-October 2020 advice, and for conducting reviews of past cases.

How Tenet Compliance Services can help

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Given the continuing regulatory focus and volume of rule changes, the importance of advisers having access to expert support and reassurance is greater than ever.

Within Tenet we have specialist pension transfer reviewers who are fully up to speed with all current rules and recent rule changes and have expert knowledge in respect of suitability.

Our file review service can support you in carrying out sample checks of your past cases or full past business reviews, helping you to identify and mitigate any risks in this area of high regulatory scrutiny, or indeed in any other line of business.

It can also support you in the writing of high-quality advice going forward. Our focus will always be on the suitability of the outcome, while ensuring all technical and disclosure aspects of the case are satisfactory.

This will provide both you, and your client, with the necessary peace of mind to face the future with confidence.

Want to know more?

If you would like an introductory informal chat to discuss how Tenet could support you in this area, please contact Marjolaine Quirke on 07342 779555.

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