However, members are now faced with a wait for many weeks to arrange an appointment, during which time the transfer is on hold.
Perhaps in part due to their lack of understanding around the advice process regulated by the Financial Conduct Authority (rather than TPR), some administrators are ‘red-flagging’ virtually every transfer and referring almost all members to the government advice service MoneyHelper.
In fact, in early 2023 the two and a half months average for a transfer has become almost a minimum, while the XPS scam flag index (an index of the proportion of transferring members referred to this service) is around 90 per cent as of March 2023, according to XPS Pensions Group.
A sense of frustration for members at the end of an already prolonged process is almost inevitable and it is left to the adviser to try and manage this.
The other big change in the past few years impacting DB transfer advice is the FCA ban on contingent charging, introduced from January 2021.
At that time, abridged advice – a form of simplified advice focused almost entirely on the client’s situation – was also introduced. This works as a means of helping clients to decide whether to incur the full advice charge.
As abridged advice can be provided free of charge, around one in three that receive abridged advice decide not to proceed to full advice, this has helped many clients avoid unnecessary fees while still making an educated decision.
However, this has added at least three weeks to the overall process and while beneficial for most clients, for those with perhaps the most pressing need to transfer it could be perceived as another delay.
Are some pension schemes/administrators better than others?
Yes – in fact the quality of administration of the old company DB scheme is the single biggest factor in dictating the likely timescale for any DB transfer.
Based on individual transfer data from 2022 of the bigger pension schemes, the slowest was Alliance Boots (Boots pension scheme) where the whole process took nine months on average, while the quickest was Babcock International (Rosyth Royal Dockyard), taking just under five months on average.
Of the big scheme administrators, Mercer administered schemes took more than eight and a half months on average, Hymans Robertson around eight months, Capita & XPS around seven months, while Willis Towers Watson transfers typically took around six months total.
Of course, this total timescale takes into account all of the aforementioned advice, and client-related delays. However, this still gives a very good indication of the impact that a well-administered scheme can have.
