What Are the New Rules Concerning Pension Transfer Advice?

Pension Transfer Advice: A Constraint of the Pension Freedoms

In an effort to improve the protection afforded to savers with deferred rights in defined benefit (final salary) schemes, when the pension freedoms came in back in April 2015 they included the new legal requirement for anyone contemplating a transfer worth over £30,000 to seek professional advice from an appropriately qualified adviser.

The other assets you hold will be relevant in this instance as your adviser will need to include them in their analysis if they are to come to a decision on whether any potential transfer is in your best interests.

Evidence of Financial Advice is Required

There are no shortcuts here. The scheme from which you intend to transfer will require evidence that you’ve received the appropriate level of advice before it can authorise the transfer.

Does My Pension Adviser Have to Recommend a Transfer?

The law does not require that your adviser provides a positive recommendation of any potential transfer or its suitability to your circumstances, only that you’ve received professional advice as part of your decision-making process. The fact that SIPP providers are increasingly insisting on a positive recommendation from your adviser doesn’t reflect the state of the law.

It reflects their unwillingness to be held potentially liable at a future date, either when the law changes or when those who press ahead with transfers that haven’t been recommended by their advisers find that the move didn’t pay off for them years down the line, and potentially seek legal redress.