Richard Porter Financial Advisers St albans

Final Salary Pensions are suitable for the vast majority of members. Transferring from a final salary pension scheme is an irreversible decision and it could have a detrimental effect on your retirement planning.

Richard Porter, Director, Lonsdale

Pension Transfers


Lonsdale Services financial advisers start with the assumption a pension transfer will be unsuitable.

Please note the following information before contacting a Lonsdale Wealth Management financial adviser in regards to a pension transfer.

Our financial advisers recommend you read our pension transfer information before contacting us. To learn more about pension transfers read: Defined Benefits Pension Transfer. To understand the differences between pension schemes and how they are treated read: Comparison of Defined Benefit and Defined Contribution Pension Schemes. Having read this information our financial advisers recommend you complete an Initial Risk Assessment Form before asking for pension transfer advice.

Pension Transfers are NOT suitable for most clients

The FCA expects all financial advisers to start by assuming that a pension transfer won't be suitable for a client. The onus is on us, as the independent financial adviser, to show evidence that it is clearly in the client's best interests to transfer before making a personal recommendation to do so.

Although Lonsdale Services has the FCA permission 'Advising on pension transfers and pension opt outs', please note we are unable to recommend a pension transfer for most clients.

FCA assessment work relating to the unsuitability of pension transfers

The FCA conducted assessment and reviewed information relating to pension transfer cases from 45 financial advisers in 2018. Less than 50% of the advice reviewed was deemed suitable. In regard to the assessment work the FCA declared: ‘Our results are based on our targeted work and are therefore not representative of the whole market.’ Our team of Lonsdale Services financial advisers was not included in the assessment. The risk management and controls Lonsdale Services has in place ensures that our financial advisers always give appropriate financial advice.

What is a pension transfer?

The FCA defines a pension transfer as being a transaction where:

Deferred benefits (regardless of when the client intends to crystallise such benefits) are transferred from:

  • an occupation pension scheme; or
  • an individual pension contract provided fixed or guaranteed benefits that replaced similar benefits under a defined benefits (DB) pension scheme

to:

  • a defined contribution (DC) occupation pension scheme; or
  • a personal / stakeholder pension scheme; or
  • a deferred annuity policy (where the eventual benefits depend on investment performance in the period up to the date those benefits will become payable)

How to assess client suitability for a pension transfer

When assessing client suitability our financial advisers take reasonable steps to ensure our personal recommendation is suitable for each client. We must take into account the following information regarding the client’s:

  • Knowledge and experience
  • Financial situation (now and in retirement)
  • Capacity for loss
  • Attitude to risk

the client's:

  • Intentions for accessing pensions benefits
  • Attitude to and understanding of the risks of giving up safeguarded benefits (or potential safeguarded benefits) for flexible benefits
  • Attitude to and understanding of investment risk
  • Realistic retirement income needs, including:
    • how they can be achieved
    • the role played by safeguarding benefits (or potential safeguarded benefits) in achieving them
    • the consequent impact on those needs of a transfer (including any trade-offs)
  • Alternative ways to achieve the client's objectives instead of the transfer
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