Chief executive Simon Chrystal said that demand for pension transfers has been boosted by commentary and reporting of transfer values of sometimes 40 or more times the forecast annual pension income that members would otherwise receive.
As a result, many people are turning to advisers with the belief that they are on the right end of a “deal”, when for many nothing could be further from the truth, he said.
Rogue advisers
Chrystal’s comments come as regulatory scrutiny intensifies on advisers involved in delivering advice on pension transfers.
According to its website, UK Workplace Solutions is an appointed representative of deVere and Partners (UK), which was issued with a section 166 notice by the UK watchdog in February.
As a result, deVere UK cannot currently provide advice on overseas pension transfers.
Chrystal said: “A reported £50bn ($65.2bn, €55.3bn) has been transferred from company defined benefit schemes to individuals since the rules changed and greater pension freedoms were introduced by the government in 2015.
“The vast majority of the people taking these pension transfers have received advice.
“Of course, there have been some rogue advisers in the sector, unfortunately, as there are in every industry, but to listen to some so-called pension industry experts continually crowing in the media, you would think that the whole sector is riddled with scandal.
“This is simply not a true or a fair representation of the facts.”
‘slammed by the media’
Chrystal explained that people who take professional financial advice “consider their options carefully and then decide to transfer their pensions” but he added that they are “routinely and arrogantly slammed in the press by many in the industry as misled, uninformed or mis-sold”.
“If these industry commentators bothered to drop the ‘we know best because we are the experts’ attitude, they might learn that the regular people we work with are not stupid, have made more good decisions than bad ones in their life, know their values and how they want to live.
“They want to organise their income in a way that allows them to do the things they did not have time to do when they were working. They understand they have to make hard choices sometimes, they have had a lifetime of such choices.
“In summary, what right, what real knowledge of dealing with regular people, do these apparent industry experts have to slam them for choosing to spend their own hard earned and prudently saved money in a way they choose?
“By pushing their agenda in this way and by creating constant distrust, they have turned what should be the point in someone’s life when they reward themselves for all their hard work, into a time of fear and anxiety.”
Chrystal concluded: “With this approach, these commentators are destroying trust in pensions at a time when access to retirement advice is more important than ever.”
Pension transfer crackdown
Pension transfers have been under the regulatory microscope for a while.
In February 2017, the Financial Conduct Authority issued a stark warning to firms advising on domestic and international pension transfers after reports that some clients are being scammed or their funds transferred into unsuitable investments.
Data released to International Adviser under a freedom of information request earlier this month found that between 6 April 2016 and 5 April 2017 the regulator took action to stop at least eight UK firms conducting and/or arranging overseas pension transfers in that financial year.
