Lack of supporting evidence
One issue that plagues the wider Defined Benefit transfer market, and is a particular problem in British Steel cases, is transfer recommendations that aren’t properly justified.
We all know clients can be easily convinced by attractive transfer values, particularly when facing uncertainty over their future. It’s down to advisers to put that figure in perspective, weigh it up against the benefits they’d be giving up and consider whether it is, in fact, in the client’s best interest to transfer.
At best, the absence of this can be put down to deficient files with missing information, or ‘Material Information Gaps’. Perhaps the adviser had collected the right information and determined that a transfer is the best way to go – it just isn’t evidenced in the file. In the worst cases, we see some transfers into expensive SIPP’s without any justification as to why this is more appropriate than alternative lower-cost funds. Likewise, a transfer may have gone ahead without having access to, or considering, the details of BSPS2 and the PPF.
Whatever the root cause, files with information gaps and a lack of evidence need to be investigated.