The tool will assist firms with the review process.
Talking to International Adviser, Selectapension director Peter Bradshaw said this kind of review would noramlly take hours to complete.
“We have recognised the demand from firms specialising in advice to members of larger pension schemes.
“The administration required around DB transfer reviews is onerous, so our facility is intended to improve the overall process.”
It follows guidance from the Pensions Administration Standards Association (PASA) that scheme administrators should process transfer requests within seven to nine working days.
More time for advice
The online feature will allow client and case data to be imported from a back office system.
“The bulk upload feature is primarily designed for advisers/firms that work closely with employers and pension scheme trustees or are in the [employee benefit consultancy] space, rather than those advisers dealing with individual clients,” Bradshaw added.
“There are an estimated four million plus people who are deferred members of DB schemes, who potentially would want advice on their pension options.”
While it may not change the level or quality of pension advice, the tool could give more time to IFAs.
“[It] will enable advisers to give the advice in a more timely manner as the manual entry of data will not be as onerous.
“This will ultimately free up time that is spent on data entry and allow advisers to concentrate more on the advice process itself,” Bradshaw said.
“By shortening and streamlining the overall process, firms should be able to service more clients.”
FCA should help out
When asked about whether there is a lack of tools and help for IFAs performing and advising on DB transfers, Bradshaw said: “It is more a lack of guidance and clarity from the regulator.
“The challenges for a number of firms is meeting the requirements of the regulator in demonstrating the suitability of their advice.”
But, could using this feature reduce the increasing PI insurance premiums currently burdening advice firms?
“Using a review tool enables the user to demonstrate and provide evidence they have reviewed the client’s circumstances and potential transfer,” he added.
“It may not lower the cost of PI insurance, but proves usage of a robust and compliant analysis.”
Plenty of opportunity still
Despite the pessimistic discourse that has surrounded DB pension transfers of late, is there still a market?
Bradshaw thinks so.
“Coverage has been negative and, in some cases, rightly so. However, for some scheme members transferring out of schemes may be the best choice.
“There will always be a market for defined benefit pension transfers.
“With uncertainties around the economy, financial markets etc. due to Brexit, we have seen a downturn in pension advice, but post-Brexit this should pick up again.”