The Pension Transfer Gold Standard is a code of practice set up by the Financial Conduct Authority (FCA), the regulator of financial advice firms. This code of practice has been voluntarily adopted by some financial advisers, including Herbert Scott. It offers specialist advice on Defined Benefit pension transfers (or other pension schemes with safeguarded benefits).
Financial firms and advisers who adopt the Standard adhere to a set of principles over and above those they are required to follow by regulation.
Pension Gold Standard intentions
- Educate – by ensuring you have enough information about the generic advantages and disadvantages of a transfer, and the availability of free guidance from the pension advisory service, before commencing the advice process.
- Help clients understanding – by providing information at outset so you can make an informed decision whether to seek professional financial advice on the transfer or conversion of pension benefits.
- Manage Conflicts of Interest – providing details of all charges and costs of transferring benefits so you are not under any undue influence in deciding whether to incur the subsequent cost of advice.
- Ensure advice given supports overall well being – in the context of your overall objectives and individual circumstances.
- Ensure the most appropriate and updated technical skills are applied – you will be supported by a Pension Transfer Specialist who has the latest technical skills and qualifications. You will also receive complete, end-to-end transfer advice, including a recommendation (where appropriate) on what to do with the transferred funds.
- Providing transparency in advice processes and outcomes – before a transfer takes place, you will receive a clear suitability report that ensures you understand how much you might be giving up to achieve your objectives by transferring.
The Government has made it a legal requirement to seek financial advice before you transfer from certain pension schemes for your own protection. The Pension Transfer Gold Standard is designed to help you recognise and find firms and advisers that are able to provide this specialist advice and which adhere to high professional standards.
At Herbert Scott
The FCA encourages a holistic view of client circumstances to be taken before any transfer is considered. The costs associated with a transfer of safeguarded benefits must also be agreed upon. Herbert Scott adopted this approach with their client relationships before the words ‘gold standards’ were ever mentioned. For years, we have been building dynamic financial plans with our clients, discussing their needs, objectives and lifetime aspirations in a series of meetings. In turn, this helps formulate our client’s long-term strategies as well as short-term goals.
For potential Defined Benefit transfers, you have the opportunity to analyse the educational information provided at outset before deciding whether taking Financial Advice is the right thing to do. No research or analysis of your scheme will take place until a basic financial plan has been agreed upon.
The FCA maintains the view that the value of guaranteed benefits available to members of a defined benefit or final salary pension scheme are such that a transfer to a flexible arrangement, where you take on the investment risk of your pension fund, is unlikely to be in most scheme members’ best long-term interests.
We would encourage everyone to seek professional financial planning advice if, after reading this article, you are left with any concerns or questions.
To find out more about the advantages and disadvantages of transferring your pension, you could consider a free guidance session via the Money and Pensions Service. To speak to one of their impartial pension experts call 0800 138 7777 and select option 2 or click here to access webchat.
Further reading is available at: https://cdn.moneyalive.io/player/pfs/
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