The topic of defined benefit (DB) pension transfers is without a doubt the most important issue for the financial advice sector - and the profession is heading towards a fork in the road.
Since the former Chancellor of the Exchequer George Osborne shocked financial services - and indeed the rest of the country - by saying nobody would ever have to buy an annuity again, the retirement savings landscape has been turned on its head.
While at first it appeared a fantastic opportunity after the retail distribution review overhauled the profession, the pressure on advisers has mounted to levels few expected.
Speaking to Professional Adviser in 2016, Personal Finance Society (PFS) chief executive Keith Richards said pension freedoms had so far been good for the advice sector and that it had elevated the role financial advice had to play in the UK. Even back then, however, Richards foresaw trouble and unintended consequences - he just did not know how damaging pension freedom and the consequential wave of DB transfers would be.
"In general, [pension freedoms] has been a very positive thing," the chief executive told PA almost three years ago. "We've got to... make sure we mitigate against the risks of unintended consequences that I think most experts know are likely to materialise - we just don't know on what scale yet. It's not a question of whether they are going to happen. It's just hoping they don't happen in any epidemics."
Richards was correct; there certainly have been unintended consequences as a result of pension freedoms, not least the 234,951 DB scheme members who sought and received regulated advice on leaving their final salary schemes from April 2015 to September 2018.
Indeed, in June 2015, two months after the freedoms came into effect, the Financial Conduct Authority (FCA) predicted only 35,000 people would require advice on transfers each year. In reality the number was almost triple the regulator's estimation.
After it was revealed 162,047 scheme members had left behind their final salary pension schemes, the FCA came out all guns blazing, saying it was "concerned" and "disappointed" by the volume of transfers and that it would "shut firms down" if it needed to.
The FCA rarely uses such strong language and it has recently followed up the threat by proposing a ban on contingent charging, alongside a consultation on rules to overhaul the transfer advice process. Belatedly, this is the regulator showing it means business.
It is clear to Professional Adviser that readers could face the difficulties surrounding mis-selling accusations. George Osborne may have fingers pointed towards him and some blame may be laid at the regulator's door, but advisers have been placed directly into the centre of the situation.
While some in the profession are confident a full-scale scandal can be avoided, PA has spoken to prominent pensions figures who think a mis-selling scandal is on the horizon, from a former chief of The Pensions Advisory Service to a campaigner who once sat on the board of the FCA.
PA is concerned that, if DB transfers were to turn into a national mis-selling saga, financial advisers would bear the brunt of the blame. In reality, however, the sector has been forced into this position by regulators and governments that were largely unprepared for what was to come. Financial advisers - or at least those advisers who did what they believed was in their clients' best interests - should not be made scapegoats.
This is why, through a series of articles this summer, PA is going to dissect pension freedoms and question why the policy was allowed to have the monumental effect it has had on DB transfers and financial advice. The series is going to ask how the pensions and advice sector got to the position it is now in - and whether advisers are set to be unfairly hung out to dry.
Now, those advisers who may have transferred multiple clients for no reason other than to make a quick buck - or indeed those who have allowed clients to put thousands of pounds into obscure and risky funds via a self-invested personal pension - should gather little sympathy. But the rest of the upstanding professionals in the sector should not have to take on the reputational or monetary burden on their behalf.
After all, finger-pointing aside, it is the advice sector who must stump up compensation levies if costs fall on the Financial Services Compensation Scheme (FSCS). What is potentially more damaging than rocketing professional indemnity and FSCS bills, however, is the headlines and column inches in the national media that will lump advisers in as one and all.
It is easy to foresee headlines screaming of "billions" that were incorrectly transferred out of what the media often refer to as "gold-plated" and "lucrative" final salary schemes. The whole sector will no doubt be tarnished with the same brush. Even when a handful of advisers were briefly thrust in the media's spotlight after the British Steel saga, the national coverage did no favours to the reputation of the sector as a whole.
This forthcoming series will assess whether the government and the FCA did enough to prepare advisers for the DB storm. The articles will also address more thematic issues like contingent charging, insistent clients, and training and qualifications, to discover what impact they have had on transfer advice and the perception of financial advisers more broadly. The series begins in earnest on Thursday (15 August).
General election on 12 December
Aviva has set out its strategy to launch an investments, savings and retirement division as it seeks to simplify its overall business.
Paid out £54m in related compensation
Likely not until mid-2020s