Third of pension schemes want IFA advice for members

One in three pension schemes have appointed - or are considering appointing - an IFA to give advice to members, according to data from pensions admins administrator XPS Pensions. The firm has called on more pension schemes to make independent financial advice available to members but has urged them to avoid advisers using contingent charging.Contingent charging occurs where a fee is only collected by the adviser if an action takes place, for example to transfer a pension.XPS internal figures show that 10% of clients have so far appointed IFA to provide scheme members with advice and another 25% are “actively considering” appointing an IFA.The XPS Pensions Group advises over 1,000 pension schemes and undertakes pensions administration for over 870,000 members.XPS makes the suggestions in a report published today called: ‘Providing members access to unbiased financial advice.’The company says that the pension landscape has changed radically since the Pension Freedoms arrived in 2015. The arrival of the Pensions Freedoms opened the door to a plethora of new choices for scheme members but placed more duties on trustees and increased risk, says XPS.Simon Reddish, senior consultant and head of IFA Selection Team at XPS Pensions Group, said: “Freedom and choice has been a game changer for the pensions industry.“We are seeing a growing number of trustees and sponsors looking to provide more support to help their members make the right decisions for their retirement. The increased level of knowledge and access to professional advice means that trustees and sponsors are in a much better position than their scheme members to select an IFA, and I think doing this can meaningfully improve member outcomes and protect schemes.”The firm warns that if trustees do nothing they risk leaving their members exposed to the risk of poor advice and falling victim to a scam.The firm suggests DB schemes should be looking for advisers who: Are truly independent – advice is not tied solely to the adviser’s own receiving arrangements Have no commission or other incentives paid to the IFA for promoting specific products Have no contingent charging structures Provide good options for members – there should be the option of a low cost, simple receiving arrangement that is not high in investment or advice fees Provide the option for ongoing advice – proportionate to the members’ needs Can engage and communicate well with the scheme’s members Have the Pension Transfer Specialist accreditation.

Third of pension schemes want IFA advice for members

Related items

News from Twitter