Principle 5 Managing Conflict of Interest

Published / Last Updated on 07/06/2019

Any person that desperately needs money - whether that is you, the person in a difficult financial position or a financial business in need of revenue

MAY CREATE CONFLICTS OF INTEREST AND LEAD TO POOR CONSUMER OUTCOMES.

How we manage conflicts of interest for pension transfer advice:

We maintain a substantial 'cash balance' in the business at all times - this is always in excess of what the regulator requires as a minimum 'capital adequacy' requirement.

WE HAVE ENOUGH MONEY IN THE BANK TO NOT BE FORCED TO TAKE ON ANY CLIENT WORK i.e. WE WILL ONLY TAKE YOU ON AS A CLIENT IF WE BELIEVE YOU ARE SUITABLE FOR THAT SERVICE AND NEED ADVICE.

OUR STARTING POINT IS THAT THE MAJORITY OF PEOPLE SHOULD NOT AND ARE NOT SUITABLE FOR DEFINED BENEFIT/SAFEGUARDED RIGHTS PENSION TRANSFERS AND OPT OUTS.  You are more likely to be told not to proceed with the service than proceed.

We always complete an initial suitability and feasibility assessment of your position and your reasons for wishing to consider pension transfer advice.

IF WE BELIEVE YOU DO NOT HAVE AN OVERRIDNG REASON FOR PENSION TRANSFER ADVICE WE WILL TELL YOU.

Staff and financial adviser pay is NOT LINKED to the amount of revenue generated by our business.

THIS MEANS AN ADVISER DOES NOT GET PAID ANY MORE BASED UPON THE NUMBER OF CLIENTS OR THE AMOUNT OF REVENUE GENERATED BY THE ADVISER.

We do not offer ‘Contingent Fee’ charging.  Contingent charging means you only pay a fee contingent on a transfer proceeding.

WE BELIEVE THIS CREATES A CONFLICT OF INTEREST i.e. firms only get paid if a transfer proceeds.  The presents a risk of ‘bias’ and poor consumer advice leaning towards transfers when it may not be in a your interests, so we do not not allow this approach.  We charge you a fee whether the advice is to remain or transfer.

We offer fees in two stages for pension transfer advice Stage 1 is a fixed fee for advice and analysis of the scheme and is payable whether the advice is to remain in the pension scheme or transfer your pension.

THIS MEANS YOU HAVE THE SECURITY OF KNOWING THAT ADVICE IS BEING OFFERED IN AN UNBIASED MANNER AS A FIXED FEE IS PAYABLE ANYWAY -  irrespective of the whether the advice is to remain in the scheme or transfer to another.

Stage 2 fees (a Risk Premium) a fee linked to the size of the transfer are only payable if a transfer proceeds as this then increases our costs for regulatory fees: Financial Conduct Authority fees, Financial Ombudsman Service levies, Financial Services Compensation Scheme levies and Profesional Indemnity Insurance premiums.  In short, the larger the liability we take on, the larger these costs are hence linking the Stage 2 (risk premium premiums).

RISK PREMIUM FEES ARE SET ASIDE TO COVER THE ABOVE REGULATORY COSTS ONLY and ARE NOT USED TO COVER STAFF OR ADVISER PAY – AGAIN AVOIDING ANY CONFLICT OF INTEREST

Staff and advisers are not allowed to advise on or take on clients for pension transfer advice. 

ONLY THE DIRECTORS/OWNERS OF OUR FIRM ARE ALLOWED TO ADVISE ON PENSION TRANSFER CLIENTS.

This minimises the risk of any conflict of interest.


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