FG 21/3 – Pre-transfer advice information for clients

This fourth in a series of articles on FG 21/3 takes a closer look at the guidance around pre-advice information for clients enquiring about pension transfer advice. The FCA calls this ‘triage’, which derives from the French word trier which means to sort or to select. This label is really a misnomer as pre-advice information is intended to enable the CLIENT to decide whether to engage with the advice process rather than the firm deciding whether to engage with the client.

You can read our previous articles on the topic here.

Pre-advice information must …

… present information factually, without making judgments, to ensure that ‘triage’ services do not stray across the regulated advice boundary. In particular, the information should be balanced, unbiased, factual and non-personalised.



Pre-advice information must not …

  • give information on the sort of consumers who might benefit from a transfer, but not give information on the sort of consumers who might benefit from remaining in the DB scheme
  • suggest that a death benefit payable as an income stream or as a lump sum is preferable
  • exaggerate the risks of a scheme entering the Pension Protection Fund (PPF)
  • present the reduction in benefits provided by the PPF as a worse outcome than a transfer
  • underplay the benefits of DB pensions by failing to mention lifelong certainty of income, revaluation and indexation, or overplaying the benefits of DC pensions by over-emphasising flexibility and death benefits
  • fail to mention the charges that would be incurred in a DC scheme and which would not be incurred in a DB scheme
  • indicate that a consumer may be more or less likely to benefit from a pension transfer, based on their personal circumstances
  • give an opinion on the likelihood of a transfer proceeding based on the absolute or relative value of the ceding scheme or proposed scheme benefits, including scheme multiples
  • send a letter to an existing client who you think is unsuited to a transfer but has expressed an interest in one, setting out generic reasons why they should not transfer but not the generic reasons why they might consider a transfer
  • provide modelling tools to scheme members of the scheme, showing illustrative values that compare the outcomes they might get if they keep a safeguarded benefit or transfer/convert it into flexible benefits.


Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

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Our View

A quick scan down the ‘must not’ list clearly indicates that the three key elements of a compliant pre-advice information process are generic facts, transparency and balance. Firms that operate such a process currently either use a self-produced or third party document that is sent to the client OR direct the client to view a third party video. Either way, it is important to remember that ‘triage’ is intended to enable the CLIENT to decide whether to proceed to taking abridged or full advice. The firm cannot make a decision to engage or not on the basis of the pre-advice information provided but can make a decision as to whether to issue such documentation to a client who does not meet certain pre-defined criteria such as age of client or amount of transfer value if these are known in advance. If not known, these ‘filter criteria’ should be clearly stated in the pre-advice information pack. Firms that use a third party video would need to include such information, and information on advice charges with the invitation to view the video.

Action Required By You

Firms should review the content of the material that is used for the pre-advice information process and ensure it falls within the guidelines in the FG 21/3. Contact ATEB to discuss how we can help firms implement a robust and compliant transfer advice service.
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About the Author

Richard is a Chartered Financial Planner and a Fellow. He has a long track record of implementing compliance regimes for firms large and small. His expertise and qualifications are broad, including pensions, investments, home finance, consumer credit and general insurance.

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