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Why Appoint a Pension Transfer Specialist?


To enable you to offer advice on Pension Transfers, which are those from Occupational Schemes, you need to have access to a Pension Transfer Specialist.  This includes transfers from which include Final Salary, Deferred Annuity, Money Purchase, SSAS, EPP and S32

There are basically three methods by which this is generally achieved:

  1. Appointing a Full Time Pension Transfer Specialist or employing someone who has the appropriate qualifications to undertake this role as part of their work.
  2.  Referring cases to another firm which specialises in this type of business.
  3.  Obtaining the services of a Pension Transfer Specialist on a contract basis.

There are of course merits and difficulties with all three options.  We must be clear at outset that our preferred route is the final option and it is on this basis which we have worked for the last seven or so years.  In the last couple of years, we have added the facility of offering the second option where suitable.


1.     Appointing a Full Time Pension Transfer Specialist

The first option requires you to locate an individual who has the necessary experience and qualifications to satisfy our regulator the Financial Services Authority.  Additionally it means ensuring they remain up to date and also supervising their work.

That individual then has a disproportionate power over the company especially within a smaller firm, as they know that they must be replaced and can demand a higher remuneration package.  If such an individual is receiving work from other colleagues, they can have difficulty ensuring work is up to satisfactory standards as they do not have the power or position of the Compliance team.  This is especially difficult if they are being passed cases by a supervisor or manager.

If the individual in question is also expected to produce their own business, they may struggle to work efficiently on pension transfer work which is less lucrative for them.  This may also mean they have insufficient cases to remain fully au fait with changes in the market place.  They will not have the time to create formal structures and systems and so may work in a more ad hoc manner.

If this individual leaves, invariably the firm reviews the situation.  We have found over the years that new clients have turned to us when such a situation has arisen and rarely reverted to the in house alternative.


2.     Referring cases to another firm which specialises in this type of business

This requires the initiating firm to pass across client details and allow another firm to deal with this specific piece of work for them.  This may mean there is a lack of impetus to complete work, which appears to result in delays in many cases.  This does frequently seem to mean there is a need to chase through progress of cases.

It also means that the commission is paid to that other firm which may then pay a proportion back to the introducing firm.  That does affect cash flow for the introducing firm.  Additionally, certain firms set the way the commission is to be generated and this may exclude renewal commission for the introducing firm.  The actual level of commission can be significant.

Additionally the case has to be transferred back to the originating firm at the end of the transaction, which involves further paperwork and follow up with the client.

We also understand that some of our competitors are less able to deal with variations in ceding scheme i.e. they can assist easily with Final Salary or Defined Benefit cases, but have significantly more difficulty with money purchase including SSAS, EPP etc.  Furthermore, the costs quoted for such situations appear to be extremely high.

This option does have the benefit of removing any liability for the transfer advice, but that is at the expense of the control with regard to the advice.

We have in recent years picked up several clients who have previously used these alternatives and come to the conclusion they prefer our methodology and working practices, which involve a clear and simple charging structure which depends on the number of plans involved as against the types of contract.

We do now offer this referral basis via one of our long term clients, where our clients are unlikely to undertake sufficient cases to make our preferred method viable financially due to the FSA fees incurred.  This referral option incurs a higher the fee per case and requires additional paperwork completed by our adviser client and their client as well as ourselves. 

We have based our systems for this firm (HDIFA) on those we use internally and so sub contract the actual pension transfer work to HDC Limited.  It means that whichever route our client uses they receive the same high standard of service and compliance with regulatory standards.


3.     Obtaining the services of a Pension Transfer Specialist on a contract basis.

This is our preferred system for working with our adviser clients.  This gives you the access you need to the technical support you require both in relation to actual transfers and also in respect of other more technical pension areas.

You only pay for the work undertaken on your behalf by HDC Limited.  If at any time you are not satisfied you can walk away and appoint an alternative PTS or use one of the other routes.

  • Many of our clients have been concerned about the costs:
  • The one charge we cannot assist with is the FSA adviser fee, which is imposed for adding Heather to the firm’s consultant list.  We understand that this is in the region of £1,500 to £2,500 and appears to vary depending on the type of firm and the permissions already granted.  This is the fixed cost, which means a certain number of cases need to be processed in a year, to make the appointment financially viable.
  • The other fear is the Professional Indemnity Insurance Premium.  Over the years, the majority of our clients have confirmed that once their PI Insurers have been provided with our detailed explanation of how we work and our PI Insurance Certificate they make little or no extra charge for extending the cover.
  • Our fees are generally set on a fixed basis, though we do negotiate hourly rate fees for certain more specialist work.

The application process is another concern and over the years we have become very familiar with this.  A detailed explanation of this process and all the required documents are available on our website and we will assist you with any concerns or clarifications required.

There are other competitors in the market place and we recommend you look at some alternatives before making a final decision.  That will enable you to consider who suits your firm’s systems and mentality best.  Our industry is based entirely on trust and as such you need to be certain the person you choose fits you and so is more likely to have a similar mentality and understand your clients’ needs and wishes as you express them.


If you decide you do wish to use us, we look forward to working with you.

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