The transfer value comparator (TVC) should be taken out of the pension transfer advice process and put into the triage stage instead, IFA Andy Boyt told delegates at Pension Debate III.
When asked what he would do to change the TVC, the AJ Boyt Chartered financial planner and freelance consultant told delegates he would prefer to deal with the comparator as part of triage, rather than during the advice process.
Speaking on a panel in London this week, Boyt suggested the impersonal nature of the TVC made it compatible with the triage process - whereby advisers give an initial steer to clients about a pension transfer inquiry, but must do so without obtaining any personal information.
Boyt suggested carrying out a TVC as part of triage could reduce the regulatory burden on a firm and - "perhaps" - make professional indemnity insurers "slightly" happier.
The TVC is part of the recent regulatory changes brought in by the Financial Conduct Authority. Last month the appropriate pension transfer analysis (APTA), alongside TVC, replaced the existing transfer value analysis system in the defined benefit pension transfer process.
The APTA element of the process compares the benefits and options available under the proposed arrangement with the benefits from the current arrangement, while the TVC shows a comparison of cash equivalent transfers and the estimated cost of acquiring the same promised income in a defined contribution scheme.
'Take it out'
"I would take the TVC out of the advice process totally and put it into the triage process - if I could get away with it," Boyt said.
"[The TVC] is impersonal and statutory, I don't think it can be interpreted as a personal recommendation, which is what we are charged with giving our clients - whether the personal recommendation is to stay in, or come out of a DB scheme."
Boyt also suggested advisers need not get involved with gathering information for a TVC and argued it should be given to clients as part of a pension statement they obtained from a scheme trustee.
"As a retired compliance director and a former company director who had the interest of that company at heart from a risk perspective, I would rather not have the TVC in my process," he continued.
"I would rather have it out somewhere as part of the triage - as part of the ‘heading them off at the pass' process."
It he could make it work, Boyt added, the TVC would come at the end of the triage process - after pointing out the pros and cons of remaining in a DB scheme.
