DB transfers – what impact will the contingent charging ban have?
From 1 October 2020, all new defined benefit (DB) transfer advice must be charged for on a non-contingent basis. An individual pays the same charge whether the advice is to stay in their DB scheme or transfer to a defined contribution (DC) arrangement.
From 1 October 2020, all new defined benefit (DB) transfer advice must be charged for on a non-contingent basis. An individual pays the same charge whether the advice is to stay in their DB scheme or transfer to a defined contribution (DC) arrangement.
This is a big change for many financial adviser firms. It is a change that the Financial Conduct Authority (FCA) hopes will eliminate up to £1 billion of harm to consumers each year. For some advisor firms, it will make giving DB transfer advice unprofitable. But whilst much has changed, much also has stayed the same. Depressingly, there are currently headlines about large numbers of transfers being taken from Rolls Royce’s DB scheme in the wake of mass redundancies. The FCA and TPR have jointly issued warning shots to the financial advisers involved. Nobody wants another repeat of the British Steel episode.
