Involved in advice on DB transfers? Then take this course of action.

There’s no challenge I relish more than getting my teeth into a DB transfer.

I’ve been involved in paraplanning them since I passed G60 in 2002, and it’s fair to say, an awful lot has changed since then.

Much has been written about the new regulations for DB transfer and opt out advice, so I’m not repeating that here, but what I have found is that it can sometimes be quite difficult to find meaningful CPD in this area, especially because it is a very complex area of financial planning with many moving parts.

It’s all very well reading about what is required, but like a lot of financial planning, having the ability to talk about the issues and learn from others can be really helpful.

And so, when I found out that Carla Langley, owner of Langley Consultancy Services, was to run a series of DB Pension Transfer Workshops in 2022, I was keen to take part.

Workshop 1 focused primarily on regulation and commercial risks of giving DB transfer advice from a planning firm’s perspective, including complaints and how they can arise.

The session was a useful blend of small group discussions and interactive presentations. It was a timely reminder to me of the challenges firms face when giving DB transfer advice, not least the substantial increase to Professional Indemnity Insurance premiums they’ve had to tackle in recent years. DB transfer advice done well can change lives, but it is also perfectly understandable why some firms have withdrawn from offering it.

But Workshop 2 was much more up my street, as it focused on the APTA and suitability process. This included a deep dive into a case study, again working in small groups and coming together to share our thoughts and opinions. We heard about an innovative way that annuity income could – or should? – be built into potential transfer solutions and the landscape for redress in the wake of British Steel.

Impressively, Carla also did live cash flow planning – that takes some guts!

There were a few key messages I took from the second workshop:

1. Demonstrating the client has a NEED to take risk when recommending a transfer is not the same as demonstrating the client has capacity or tolerance for risk, and a lot harder to do! Without being able to demonstrate a need to take risk, a transfer just isn’t suitable.
2. Exploring alternative solutions that could offer ways for client objectives to be met without transferring is, of course, mandatory. But it’s clear that it can require a great deal of skill by the planner to explore these thoroughly and then explain to sometimes very persistent clients that they aren’t getting the recommendation to transfer they might expect. Despite the good intentions of the TVC, I get the impression that many clients still focus on the big number on their CETV statements.
3. The different ways firms described how they approach APTA was very interesting. Some use highly technical and analytical methods, while some are perhaps more subjective. I don’t think there is a right or wrong way, provided the advice is demonstrably suitable.

In all, the two workshops were very well structured and presented. Carla is a brilliant host and really knows her stuff. She led the sessions with skill, taking time to listen to views and talking through the issues as they arose, all the while reminding us of what we are required to do.

I would recommend Carla’s workshops to anyone involved with DB transfer advice. For me, it was two days well spent and certainly reassured me that good quality DB transfer CPD can be found.

You can book, and find a whole host of other good stuff, at langley-consultancy.co.uk