A survey from Investec Wealth & Investment found that almost a fifth of advisers expect a significant increase in DB pension transfer enquiries, with just 2% predicting a decline.
Almost three quarters of advisers received DB transfer enquiries in March, up from 68% in July 2016.
IFAs predicted that, on average, they will continue to receive enquiries for a further nine years, generating a substantial long-term new business opportunity.
Thanks, but no thanks
However, despite the volume of potential business, the findings revealed that many IFAs are declining to provide DB transfer advice.
The top reason, cited by 71% of respondents, was that the risks associated with challenges to historic advice were too high.
Nearly half said that the process is complex and clients are resistant to paying appropriate fees, while 45% cited a perceived lack of regulatory support.
Almost a third of IFAs fear that there is too much of a focus by the regulator on the ‘headline’ figures involved in a DB transfer at the expense of ‘softer’ client needs.
Mark Stevens, head of intermediary services at Investec W&I, said: “As the wider market environment adapts to a ‘new normal’, the values being placed on DB scheme transfers have become very attractive and the demand for qualified advice shows no sign of slowing down.
“DB scheme transfers have increased the opportunities for IFAs to advise new clients on their pensions and broader financial needs. However, it’s a fast-changing market and the complexities and risks involved mean that in many cases discretionary investment managers are integral to the effective management of client portfolios.”
