Keith Richards, chief executive at the UK organisation, has proposed an additional independent warning from the trustee of a pension scheme warning “insistent” clients that advisers and trustees will be exempt from any future redress should their decision to cash in their pension go wrong.
“If clients are still confused in any way regarding the advice they have been given, this extra independent warning by the trustee should make them think again before proceeding, further protecting their best interests,” he said.
“I agree with the principle that it should be the public’s right to make an informed decision, but they must also accept responsibility for doing so.”
He added that the PFS has registered its concerns and recommendations with the Government and the Financial Conduct Authority, and is currently in talks with both.
The PFS expects demand for the facilitation of defined benefit pension transfer to steadily increase following the pension reforms on 6 April, which removed the requirement for an annuity on UK pensions.
The body said the UK must take heed of similar situation in America and Australia, where such flexibility has resulted in retirees running out of both capital and income early into their retirement.
“For the concept of pensions freedoms to operate successfully in the way envisaged by the Treasury, it must be accepted that refusing to facilitate an unsuitable insistent client transfer or annuity re-sale will in most instances be an appropriate decision for an adviser to take from a professional standards perspective.”
