The Pensions Advice Taskforce is to launch a consumer guide for defined benefit (DB) transfers as part of a sector-wide collaboration to help the public understand what to expect from professional financial advice.
The taskforce was established by the Personal Finance Society (PFS) and the guide will be linked to an adviser code, which will be based on nine principles underpinning good practice when giving pension transfer advice. The guide will be called the pension transfers ‘Gold Standard’ and advisers who adopt the code will be required the display the Gold Standard badge.
The Pensions Advice Taskforce is an industry-wide representative body designed to enhance consumer awareness and protection in areas of complex pension advice. It also aims to align standards across the industry and, ultimately, it was made to help to protect the reputation of the majority operating in the advice sector.
The PFS made the taskforce in response to the stress, uncertainty and potential financial loss to individuals that arose from the closure of the British Steel Pension Scheme in early 2018, and the growing public statements of concern regarding some adviser practices.
The taskforce is made up of a number of representatives from pension scheme trustees, financial advisers, pension providers, compliance consultants and professional indemnity insurers. The newly launched Money and Pensions Service, which brought together the Money Advice Service, The Pensions Advisory Service and Pension Wise, is also involved.
The consumer guide will be the first initiative the taskforce has delivered. Consumers will be able to identify advice firms that have adopted the standard by visiting the retirement directory on the Money and Pensions Service website, which will be supported by the PFS and incorporated within its own directory.
‘Go the extra mile’
PFS CEO Keith Richards (pictured) said the Gold Standard is about raising consumer awareness and redressing the knowledge imbalance between firms giving advice and consumers seeking it.
“Crucially, the Gold Standard will allow advisers to align with initial guidance provided by Pension Wise and included with initial valuations from scheme trustees,” Richards continued.
“An adviser or firm that adopts the Gold Standard is demonstrating that they are prepared to go the extra mile in order to foster trust in our profession while also addressing the concerns raised by the Work and Pensions Select Committee.”
Money and Pensions Service CEO John Govett added: “We welcome the Pension Transfer Gold Standard as a great industry initiative designed to help consumers find the specialist advice they need when considering whether to transfer safeguarded pension benefits.”