Independent Financial Advisors - Ongoing Monitoring Services

15 November 2019

For a long time companies and trustees have been challenged with ensuring their members get quality advice at the point of retirement and beyond. It is interesting to see this being discussed and new solutions being developed which will help monitor the provision of these services by independent financial advisors (IFAs).

Ruston Smith, Chair of the Tesco pension scheme, wrote an article to shine a light on this common issue. The quote below summarises the main concept:

“Employers and their pension fund trustees spend lots of money to get the right advice on how their members’ pension should be invested, managed and administered when they are saving – but, in many cases, leave those members to fend for themselves when it’s time for them to choose how to invest and manage that money throughout their retirement.”

An increasing number of trustees and employers are appointing IFAs to assist retirees in taking some of the risk out of making difficult financial choices to plan their retirement and invest their pension for it. Appointing an IFA on behalf of scheme members would be considered good governance given legal obligations to protect member benefits.

However, there is a risk of appointing an IFA, the advisor may not deliver good advice or the advice may not be understood by the member which could result in possible litigation to those that appointed the IFA firm.

IFA appointers want comfort that members are receiving good, clear, simple and appropriate advice. Appointers and members alike should be aware of the potential risk that the IFA could fail to deliver on its promised services or provide ill-advised suggestions. While the IFA itself is a regulated entity, should inappropriate advice be provided there is risk that affected members attribute some blame to the trustees or employer as the party appointing the IFA.

The current pensions regulatory environment places greater scrutiny on both trustees and employers, and it is becoming even more important to be doing the right thing for members beyond the point of retirement.

So what is the solution?

We have developed a proposition to monitor the ongoing provision of advice by IFA firms to pension scheme members.

Bringing together experts from around the firm, we are able to provide a tailored approach to monitor the appointed IFAs using KPIs and metrics we have developed. Our proposition seeks to facilitate transparency in compliance with regulations and ensuring that advice is in line with members' stated objectives. We will monitor the IFA to assess any actual or upcoming changes in the nature and conduct of the IFA firms’ service offerings, as well as on the IFA firm’s suitability to continue to be the appointed IFA in the following areas:

  • The IFA’s financial position and advice types offered
  • The IFA’s People and training provisions
  • The IFA’s regulatory requirements, fines and reporting
  • Appropriateness of member advice & member satisfaction of service
  • Member feedback including the IFA’s complaints and remediation process
  • Fee charging mechanisms

We have unrivalled expertise to provide a packaged, multi-disciplined approach, with pension specialists that have experience in covenant, actuarial and investment practices. Our offering also leverages from our IFA selection centre of excellence team who will support this work directly. They undertake regular due diligence and conduct site visits with the leading IFA firms in this market. Our award winning team has relevant experience of providing and reviewing individual pension transfer and retirement advice, as well as strong credentials in undertaking independent business reviews.

If you would like to hear more or discuss this with us further then please get in touch with us.

Stephen Soper

Stephen Soper | Partner, Senior Pensions Adviser
Profile | Email | +44 (0)7885 403139

Katie Lightstone

Katie Lightstone | Director
Profile | Email | +44 (0)7850 907998

Steve Etherington

Steve Etherington | Director
Profile | Email | 44 (0)7739 874 222

Dhrupti Shah

Dhrupti Shah | Manager
Profile | Email | +44 (0)7525 280946



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