DB Reviews

Does anyone review their clients DB schemes on an annual basis to keep track of the transfer values?  

We don't but I am starting to think that we should build this into to our annual reviews, especially given how high DB transfer values are. 

Also what would be the possible liability that a firm would face if they advised a client to retain a DB scheme and then the Transfer Value fell?



  • @PeterM Good question. We tend to leave it to the adviser to decide whether the client needs the DB review or not at the moment. Some clients will take their DB scheme pension no matter what so the advisers are reluctanct to 'waste time' so to speak and carry out reviews where they feel they are not needed at least until the lead up to retirement - at the end of the day they have the final say and the liability rests with them.

    We have noticed that DB CETVs have fallen back a bit from their highs around the middle - end of last year.

    As COBS 19.1.6G is still the position until the FCA say otherwise it would be incredibly hard to be found liable for not recommending a transfer if the CETV fell later on as the default position should take precedent.  I'd be more concerned if the advice was to transfer a DB pension and the CETV expires, and then is subsequently lower (quite a risk at the moment given long queues for TVAS reports from external providers).
  • Hi Peter

    I think that the position has to be to establish if the client is fit for consideration for a transfer. If you are registered with Standard Life they have a great 'triage placemat' in the business support section. This can be used to have an educational conversation with the client. If they aren't right for a transfer, that's the job done. The review question is then a simple 'has this changed?'.

    If you have a client who is right for further consideration then you can go down the full advice process, where, in my firm, they pay for the advice they get. This might still be not to transfer, but the client has been through the triage process and understands the value from getting the full picture.

    If advice was to retain then i wouldn't revisit unless there were reasons given to do so in the report or the client's plans changed. An example of the former is where we have recently said to a client, 'yes, a transfer looks like it can do well for you but right now the scheme also meets your objectives and you're 12 years from NRD. Let's look again in a few years.' Client is very well informed, knows that the risk is that she dies and the legacy is lower but that the likelihood is that she survives and has the chance to evaluate again. Maybe in that case you could request a CETV each year but I'd only do this with the client's consent.

    As for complaints, I'm struggling with this. In your scenario what are you saying? If you've advised them to retain then you'll have reasons that will stand scrutiny regardless of the CETV. If it fell this would probably only strengthen the advice you'd already given.

    Also, I simply don't know how you would begin to redress any upheld complaint about advice not to transfer a DB case, or even if it would be an eligible complaint. I've recently asked the Ombudsman for some information on this very point and the reply is waiting my follow up as I wasn't happy with it. 
    Benjamin Fabi FPFS
    Chartered Financial Planner

  • NathanNathan Member

    Be interested in the reply if you get one Ben
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