FT Adviser (10/05/2019) – Some financial advice firms have started charging their clients for triage services that were previously offered for free, FTAdviser can reveal.
Russell Facer, managing director at compliance support services Threesixty, said since the Financial Conduct Authority introduced stricter rules on triage firms have started to use third party providers and are charging for the service.
Some are using Money Alive’s Final Salary Portal videos which launched as a prototype in November 2017.
These are made up of a series of 17 short videos, each illustrating a particular issue relating to defined benefit pension transfers, such as what it means for a person’s guarantees if they transfer out, or what it means in terms of taxation if they stay.
The FCA has applied a stricter test to guidance services during triage from January. Under this any guidance based on a consideration of a customer’s circumstances “which steers them one way or the other” is likely to be considered advice on the merits of a transfer, and therefore pension transfer advice.
This was after it found a “lack of understanding” among advisers of the boundaries between guidance and advice in its consultation on the matter.
Alan Chan, chartered financial planner and director at IFS Wealth & Pensions, doesn’t find any issues with firms charging for their triage service.
He said: “It’s a commercial decision – there’s obviously a cost associated with constructing and maintaining this kind of service and ensuring it’s up to date with current regulations, so that the client will be in an informed position to decide if they want to proceed further and engage in proper financial advice or not.
“The consumer is not forced to use them, and there may well be others who will offer a triage service for free. I think it will be particularly important that firms do not mandate potential clients to use and pay for their own triage service as a prerequisite to obtaining pension transfer advice with them. In my view, the triage service is supposed to aid the consumer and help them to decide from very early on in the process if they want to go further or not and should not therefore be an added cost on top of their advice fees.”
Full article link: https://www.ftadviser.com/pensions/2019/05/10/advisers-start-charging-for-triage-services/