Standard Life has been accused of steering advisers towards giving advice during the triage process of a pension transfer inquiry, rather than sticking to the impersonal guidance expected by the regulator.
In a policy paper published earlier this month by the Financial Conduct Authority (FCA), the regulator confirmed it would continue with its parameter guidance on the triage process, meaning firms must not provide any kind of personalised guidance during the process because they risk straying into the parameters of regulated advice.
But a reader of RP’s sister publication Professional Adviser, who asked to remain anonymous, has highlighted a leaflet for Standard Life produced for advisers, suggesting it did not meet the regulator’s expected standards.
The leaflet (pictured below), which is no longer featured on the provider’s website, was titled ‘Triage: managing demand for DB transfer advice efficiently and safely’, and suggested that, if a client ticked certain boxes, not transferring their pensions would be the best course of action for them.
The tick-box options included whether a client needed a guaranteed defined benefit (DB) income to support them, had little or no excess assets above retirement needs, and still had to save more to meet retirement needs. There were also questions on the leaflet that related to client health and wellbeing, client income and client assets.
“When I was working as an outsourced paraplanner I was seeing quite a few different firms,” the reader told Professional Adviser. “Advisers loved [the Standard Life leaflet] because advisers love tick boxes – it makes their lives easier.
“The issue I had with it was that you can’t really do it [follow the leaflet] without giving a personal recommendation, which is therefore advice from a regulatory perspective – you’re basing the answers on personal information.”
The reader expressed concern that giving informal advice could land advisers in trouble with the regulator at a later date.
“It’s a grey area,” they continued. “The problem is, if an adviser had done a triage process on a client, and then the client had transferred without them being involved, in theory the FCA could come along and say ‘you provided advice, you provided a personal recommendation, show me the file’. And, of course, they wouldn’t have a file, but the client could argue they took from that conversation that they should transfer.”
‘What matters is what the adviser says’
Professional Adviser put these concerns to Standard Life head of financial planning propositions Alatair Black, who said the leaflet was written “in the context of the rules at the time”, and that the regulator had since “made it clear you shouldn’t be having those conversations”.
Black suggested, however, the leaflet could still prove a useful document to advisers so long as the client volunteered the information during the triage process, as oppose to the adviser requesting the information.
He added: “What the FCA does understand is that in any client-adviser conversation, the adviser might not want to get that personal information, but the client will tell them. So the triage document as it stands is useful to advisers because it will help them determine if they, as an adviser, want to take it to the next stage.
“What matters is what the adviser says to the client. If the adviser, having got that information, decides they don’t want to take this further forward because they know they will be giving the client advice not to transfer – if they say to the client ‘I don’t want to take this any further because I know I’m going to be giving you advice not to transfer’ – that’s also advice. It’s about how they use the information and how they respond.”
An FCA spokesperson confirmed to Professional Adviser it was aware some firms had unknowingly been giving advice.
They said: “We are aware that some firms have been inadvertently giving advice when they should only having been giving guidance. Our new perimeter guidance will allow firms to understand how they can provide appropriate advice without straying across the advice boundary.”