In the UK, a pension transfer specialist gives or checks advice on moving a defined benefit pension. Here is how to find one and check the firm.
If you have a final salary or other defined benefit pension and are weighing up a move, the adviser whose sign-off counts is a pension transfer specialist. This page covers what the role is, how to check a firm's transfer permission on the FCA register, and what the advice costs. Should you prefer to begin with a no-cost chat about retirement choices, an FCA-authorised adviser rings back anyone who asks for that on the form on this page. Ask any firm, that one included, whether it holds the permission for transfer advice and what that advice would cost.
What is a pension transfer specialist?
A pension transfer specialist is the person in an authorised advice firm who gives, or signs off, advice on moving benefits out of a pension with guarantees. The role comes from FCA rules (COBS 19.1.1A): "A firm must ensure that advice on pension transfers, pension conversions and pension opt-outs is given or checked by a pension transfer specialist." COBS 19.1.1A(2) lifts that requirement if a guaranteed annuity rate is the only safeguarded benefit involved.
"Given or checked" matters when you choose. The person you meet may not be the specialist. Where a firm uses a specialist to check its advice, the FCA's guidance says that specialist should look at the whole of it, confirm any recommendation is suitable for you, and agree in writing before you receive it.
There is a qualification behind the title. The FCA's training and competence guidance says someone doing the job must be qualified to the same standard as an adviser on retail investments, plus a further qualification for pension transfers. A specialist is therefore not a general adviser with a new label.
The FCA and The Pensions Regulator "believe it's in most people's best interests to keep their DB pension." Expect to be asked early on why you want to give up a guaranteed income; the FCA names it among the first things to be explored. What a final salary pension is and whether to move one have their own pages.
Who must see a specialist before a final salary transfer?
The legal duty sits with your scheme. Section 48 of the Pension Schemes Act 2015 makes the trustees or managers confirm you have had appropriate independent advice before they pay a transfer to flexible benefits elsewhere. It applies to safeguarded benefits, meaning anything other than money purchase or cash balance benefits, so an ordinary defined contribution pot is outside it. The adviser must hold FCA permission (or be an appointed representative of a firm that does).
The size test is in regulation 5 of SI 2015/742. Since 6 April 2018 it reads: "The trustees or managers are not required to carry out the check in section 48(1) of the Act if the transfer value of the member's or survivor's subsisting rights in respect of safeguarded benefits under the pension scheme is £30,000 or less on the valuation date." The FCA's wording for consumers is: "If the value of your DB scheme is more than £30,000 you must, by law, get advice from a regulated financial adviser."
The full £30,000 test, the 2021 conditions and what happens if you ignore the advice are in the advice requirement, and how the figure is worked out is in pension transfer values.
How do you check a pension transfer specialist on the FCA register?
Search the Financial Services Register for the firm, then for the named adviser. The FCA calls it "a public record of firms, individuals and other bodies that are, or have been, authorised by us or the PRA." For this work it says: "Firms who can offer DB transfer advice are listed as 'advising on pension transfers and opt-outs'."
- Find the firm and read its status. It should show as authorised, and MoneyHelper says to use the register to check that you have the firm's genuine contact details.
- Look at the permissions. For a defined benefit transfer you want to see advising on pension transfers and opt-outs, not only general investment advice.
- Check the individual. The FCA says to check "the details of any individual carrying out regulated activities on your behalf, especially current roles, and any disciplinary or regulatory action on their record."
- Find out who the firm answers to. Some entries are appointed representatives acting for a principal firm. Ask the principal firm what the representative is allowed to do, and what protection you would have.
The register is a public record of authorisation and permissions rather than a set of customer reviews, so do not expect star ratings there. If an appointed representative's protection is unclear to you, an adviser will go through it at no cost after you send in the form here.
How do you find a defined benefit transfer adviser near you?
Start from a regulated source, then check each name yourself. MoneyHelper says online directories "let you search for regulated retirement advisers near you"; finding a pension adviser walks through them. The extra step for a final salary pension is to confirm the firm advises on transfers at all.
Plan the timing. The FCA warns that a transfer value "is only guaranteed for 3 months, so it's a good idea to make a shortlist of the advisers you might use before you get the transfer value." Asking for the figure is covered in how to transfer a pension.
Firms differ in range. The FCA notes that some are independent, while "others are restricted so can only focus on a limited selection of products or providers." Ask which you are being offered, and whether the person advising or the person checking is the specialist.
Be wary of how an adviser reached you. The FCA says "Never take advice from the company that contacted you. This may be part of the scam." Our guide to pension scams and the FCA's pension scams page list the warning signs.
Before paying for transfer advice, some people like to talk over their position first. An FCA-authorised adviser offers that by telephone, unpaid, to anyone sending the form on this page; that call is a starting conversation, not the regulated transfer advice a scheme asks to see.
How much does a pension transfer specialist cost, and how are they paid?
You pay a fee for the advice itself. MoneyHelper says of this advice: "This can often cost thousands of pounds. You must pay for the advice unless your employer has offered you a financial incentive to transfer out, then your employer must pay." Charges vary between firms, so it is worth getting quotes from more than one before you choose.
MoneyHelper gives examples of charging: by the hour, a set fee for a single review or plan, or a fee linked to the value of your pension or investments. Before committing, you must be told how charging works, what it will cost and whether anything is payable on an ongoing basis.
The FCA makes a point that surprises people: "In most cases, you will need to pay the same amount for full advice, whether or not you go ahead with a transfer." You are paying for the analysis, and the answer may be to stay put. There is a shorter route, abridged advice, which can confirm you are not suited to a transfer and "might be cheaper", in MoneyHelper's words. It does not let an adviser confirm to your scheme that you took transfer advice, so going ahead would still need full advice.
Fee types in general are in what pension advice costs; the new scheme's own charges are in pension transfer fees.
What should the advice from a specialist include?
The FCA expects detailed questions about your circumstances and, with any recommendation, a written suitability report. That report should state the recommendation, explain the reasoning, and help you see the risks and benefits of transferring or staying. If the advice turns out to be poor, MoneyHelper says regulated advice lets you complain and ask for compensation, which is another reason to check the register first.
Common worries when choosing a pension transfer specialist
Is a pension transfer specialist the same as an independent adviser?
No. Independent and restricted describe how wide a range of products a firm can recommend. Pension transfer specialist describes who is qualified to give or check transfer advice. A firm can be either kind, so ask about both.
Can an adviser who is not a specialist advise on a final salary transfer?
Only if a specialist checks the advice, because the rule says it must be "given or checked by" one. Ask the firm who does which.
Do I need a specialist to move a money purchase pot?
Not for the scheme's advice check, which covers safeguarded benefits; those exclude money purchase and cash balance benefits. A guarantee such as a guaranteed annuity rate is itself a safeguarded benefit, so check for one; otherwise a defined contribution move follows different rules.
What if my transfer value is £30,000 or less?
The scheme need not run the advice check at or below that figure. Whether a transfer suits you is separate, and the FCA's view on keeping a DB pension still stands. An adviser can explain on a call-back what options exist for a smaller defined benefit pension.
Can I check a specialist's qualifications myself?
The register is the place for permissions, current roles and disciplinary action. On qualifications, MoneyHelper suggests asking what a qualification means and whether the adviser has handled a case like yours.
Is there free help instead of a specialist?
Not for the advice itself, as the law asks for regulated advice above the threshold. Free pension advice covers the guidance that is free.