Retirees could find it difficult to access regulated financial advice when considering defined benefit (DB) to defined contribution (DC) transfers, according to Punter Southall.
The Treasury's consultation response to Budget changes, published yesterday allowed DB to DC transfers for members of private sector DB schemes subject to them taking regulated financial advice.
This advice would need to be independent meaning the cost is likely to fall on the individual.
However, many people will be reluctant to pay for this advice according to Punter Southall's head of private clients Henry Denne.
"Much of the advice process will start on the presumption that remaining in DB is in the best interests of the individual," he said. "The cost or providing this advice could cost a few thousand pounds and this will need to be paid to the adviser regardless of the outcome of the discussion. They may advise against the transfer. I think individuals will find it difficult to access advice at a reasonable cost."
Denne also believes advisers may be reluctant to advise on this area once they understand the full impact of the decision.
"When advisers read through the guidance on enhanced transfer value exercises they will realise how much care needs to go into advising in this area," he said.
Punter Southall principal Alan Morahan agreed, saying strong checks will need to be put in place to ensure any advice taken by members is sufficiently robust.
"DB schemes will need to check that advice has been taken but how are they going to do this?" he said. "We will see trustees taking legal advice on this process and you could see them asking to see evidence of this advice - do they need to see some kind of stamp for instance? Some protection is needed."
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