- Helping members of occupational pension schemes to better understand their benefits.

18th April 2019
:: Adviser | The Office | Safer Record Keeping

 Get Out of Jail Free card
Safer Record Keeping
Being a financial adviser is not for the faint-hearted, especially in the current 'compensation culture' climate.
For those advisers who experienced the 'pension review' process, many will recall the frequent media headlines brandishing the phrase 'pension mis-selling'.
In fact what the (then) regulators survey revealed was not that pension mis-selling had definitely taken place - but that there was insufficient evidence retained on client files to substantiate a reason to transfer clients' pension benefits from (or opt-out of) defined benefit schemes. The review was about processes rather than establishing intent to mislead. For those who had good processes the quality of the advice was rarely questioned.
No doubt a degree of miss-selling did take place - but it is ironic that the pension review process that followed channelled tens of thousands of scheme members back to their original schemes as part of the 'redress' process, where reinstatement was permitted.
Many of those people were reinstated into their original pension schemes only to find that the employer in later years went bust (or wound up the scheme) leaving them with substantially reduced benefits. What 'redress' did these people have against the regulators 'guidance' of reinstatement? The Financial Assistance Scheme will not cover many of these schemes.
Bear the following pointers in mind:
If you know your client has benefits in a defined benefit scheme or other employment based pension scheme, you should always recommend they regularly review those benefits.
If you don't think there's enough profit in you performing regular reviews, then tell your client - they always have the option of finding another adviser (have you thought of introducing this business to another adviser).
Lack of profitability to your organisation doesn't stop a client trying to sue you because you didn't suggest a pension appraisal.
Don’t rely on ‘mentioning something in passing’ to your client, whether it concerns a current financial transaction, or a potential review. Record on your file what you have said, and confirm it in writing to your client.
If you charge fees, and your client can't afford, or simply decides not to undertake a review of pension benefits - record that you have recommended one. You might want to use, or adapt the following letter, with our compliments:
  MS Word document image Safer record keeping

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