Firstly, the client takes around 40 days in total to consider the information provided in relation to a transfer.
In order, this would be the initial triage information, the abridged advice report, the full advice suitability report and, finally, completion of the transfer forms.
Secondly, the existing pension scheme typically takes around a month to provide a cash-equivalent transfer value/benefit statement and immediate retirement options, and a further two and a half months to actually complete the transfer.
Finally, the advice. This typically can, and arguably should, take up to two months, encompassing the initial fact-finding, investigation of any workplace pension or other potential receiving scheme, and production of the abridged advice report and full advice report – the latter of course needing supporting TVAS (transfer value analysis report), APTA (appropriate pension transfer analysis), and transfer illustrations.
Unlike the conventional ‘final file check’ in most other realms of financial advice, given the inherent risks involved in DB transfers (for both client and adviser), a robust process should include ‘live’ file checking throughout.
This would incorporate both stages of advice, as well as the APTA and TVAS and any other key figures work that could have a serious impact on client decision-making.
As mentioned above, by far the longest single element of the process is the actual transfer itself.
What has changed in the past few years?
A big change is that regulators have launched a host of new rules applicable to pension schemes, in theory intended to safeguard members transferring out.
Schemes are now carrying out scam calls and/or being referred to third-party services such as MoneyHelper to carry out a more detailed questionnaire with the members.
Initially scam calls are typically 10-12 questions, such as ‘are you aware of the risks of transferring?’, ‘who provided you with advice?’ and ‘were you encouraged to transfer out?’.
In the event that a member 'fails' any of these questions, this can result in further delays, while the ‘red-flagged’ transfer is referred for additional checks.
MoneyHelper is generally an even more in-depth questionnaire carried out over the phone with the member, and although similar types of questions are asked, due to demand members are generally waiting at least a month for this conversation.
Clearly this type of checking is done with the best of intentions and could help to safeguard against the next British Steel-style scenario, whereby a scheme sees a sudden surge in transfer activity, or members individually being incentivised to transfer for the wrong reasons.
