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Pension Switching Leaflet will help IFAs demonstrate suitability
03 June 2009
Scottish Life, the pensions specialist arm of the Royal London Group, has introduced a "pension switching suitability" leaflet to assist IFAs when it comes to recommending pension switches to clients.
Following the thematic review of pension switching last year, the FSA's report highlighted various issues which could give rise to unsuitable advice. The report included a number of questions which IFAs need to be able to answer in order to ensure that a pension switch does not lead to unsuitable outcomes for the customer.
In the new leaflet, Scottish Life has identified several specific features of its Pension Portfolio (personal pension/ SIPP/ drawdown plan) which can help IFAs to complete the FSA's pension switching suitability assessment template when recommending transfers.
Features that IFAs can use to support the decision to transfer to Scottish Life's Pension Portfolio include:
- New, competitive charging structure which compares favourably with stakeholder pension plans and avoids any unnecessary costs
- Financial adviser's fee, with a transparent, factory-gate pricing model which allow product charges to be more easily compared
- New investment proposition, which provides a range of portfolios based on the customer's attitude to risk and term to retirement, overlaid with a robust and comprehensive governance process
- Rebalancing facility and lifestyling, that help ensure the portfolio remains suitable over time
- Income Release, for those clients wanting flexibility as to how and when they access their pension benefits - further charges may apply.
Fiona Tait, Business Development Manager at Scottish Life said:
"In their report, the FSA made it clear that they expect advice to be based on each client's individual circumstances, to avoid the potential of unsuitable outcomes. But it's important to understand that by highlighting the potential issues which may arise from a recommendation to transfer, the FSA is not saying 'don't do transfers'; they are simply saying that transfers should be done properly, following a consistent advice process.
"Our 'transfer suitability leaflet' has been designed to help advisers evidence the reasons for recommending a transfer.
"As a champion of independent financial advice, Scottish Life has an ongoing commitment to provide IFAs with the support and information they need to give clients the best possible advice. And Pension Portfolio - with its clear 'pay as you go' charges and comprehensive investment governance - demonstrates this commitment perfectly."
For further information about pension switching: www.scottishlife.co.uk/pensionswitching
For further information about Income Release: www.scottishlife.co.uk/incomerelease
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For further information please contact:
Scottish Life
Alasdair Buchanan, Head of Communications
0131 456 7133
07919 170 413
Polhill Communications
Sally Biggs
020 7655 0520
Editor's Notes:
Scottish Life was founded in 1881 in Edinburgh as a proprietary company, becoming a mutual company in 1968.
On 1 July 2001, Scottish Life demutualised and transferred its business to The Royal London Mutual Insurance Society Limited. Scottish Life is a division of Royal London and is the specialist pensions business within the Group, providing individual and group pensions to the market via intermediaries.
Scottish Life and Royal London's other intermediary businesses are based mainly in Edinburgh where 1,180 staff are employed, with 720 working in other parts of the UK and overseas.
Royal London Group, is a specialist financial service provider. Its businesses focus on those sectors of the market which value quality propositions, operating through a number of brands:
- Scottish Life - UK pensions market
- Bright Grey - UK protection market
- Scottish Provident - UK protection market
- Royal London 360° - offshore investment markets
- RLAM - fund management
- RLAS - life and pensions administration
- Fundsdirect / Ascentric - funds supermarket; Wrap platform
Royal London also distributes life and pensions products through Abbey's national branch network.
Royal London is the largest mutual life and pensions company in the UK with Group funds under management of £32.5 billion. Group businesses serve around 3.6 million customers and employ 2,870 people. Figures quoted are as at 31 March 2009.
