Pension Transfer Specialist Status

We recently pondered the question, “Does a Pension Transfer Specialist (PTS) need to be a CF30?”

Requirement for a PTS

COBS 19.1.1A states:
“A firm must ensure that advice on pension transfers, pension conversions and pension opt-outs is given or checked by a pension transfer specialist.”

A PTS is defined as an individual who:

  • has passed the required examinations as specified in TC; and
  • is employed by a firm to give advice on pension transfers, pension conversions and pension opt-outs or to check such advice in accordance with the provisions of COBS 19.1.

As can be seen, there are two distinct activities that a PTS can undertake … advising and checking.

PTS as adviser
There is no debate about the status of a PTS who actually advises clients. Clearly, such an individual must be a CF30.

PTS as checker
But, what is the status of a PTS who ONLY checks advice given by others (assuming that such a role exists in any firm)? In order to answer this question, it is necessary to look at the definition of CF30.

Previously pension transfer specialists had to be registered as CF24. CF24 was merged into CF30 back in 2007. It is now included in SUP 10A.107R as follows: 

Customer function (CF 30)

The customer function is the function of:

  • advising on investments other than a non-investment insurance contract (but not where this is advising on investments in the course of carrying on the activity of giving basic advice on a stakeholder product) and performing other functions related to this such as dealing and arranging;
  • giving advice to clients solely in connection with corporate finance business and performing other functions related to this;
  • giving advice or performing related activities in connection with pension transfers,pension conversions or pension opt-outs for retail clients.

The fact that PTS previously HAD to be registered as CF24 suggests that, when that CF was merged into CF30, the requirement for PTS to be registered as a CF30 should follow.

In addition, checking transfer advice can reasonably be assumed to qualify as ‘performing related activities’. Further support for a PTS needing to be a CF30.

So, while it is difficult to pin down a clear single point answer in the rules, all indications are that a PTS should also be a CF30.

The final aspect to consider is whether a PTS will be a certificated function under the Senior Managers and Certification Regime (SM&CR) that will apply to FCA solo regulated firms from 9 December 2019. We reckon that the PTS role clearly comes under the definition of the ‘Client Dealing Function’.

This function is expanded from the current CF30 function, and applies to any person dealing in or arranging investments with clients.

The definition includes any individual who has  scope to choose, decide or reach a judgement on what should be done in a given situation, and whose tasks require them to exercise significant skill, discretion or judgment. 

Permissions and liability
Regarding the employment status of a PTS and the liability for advice, only firms with the FCA permission to advise on pension transfers may advise on pension transfers. It is not acceptable for a firm without the permission to outsource the transfer analysis to a PTS or to a firm with the permission, and claim to be advising on the pension transfer. 

A firm without the permission to advise on pension transfers may refer a client needing pension transfer advice to a firm with the permission. Where both firms may be responsible for different elements of advice given to the client, firms are expected to liaise for consistency. For a firm with the permission, FCA rules permit an individual who is not a PTS to advise on pension transfers. However, as indicated earlier, in this event, the firm must ensure that the advice is checked by a PTS.

The firm advising on the transfer remains responsible for the advice, including the advice checked by the pension transfer specialist, even where the pension transfer specialist is not employed by the firm.


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

Although there is no definitive Yes/No answer to the question, all evidence points towards the PTS also needing to be a CF30 and this is ATEB’s house view, particularly in light of the impending SM&CR making this requirement clearer. A PTS will have to be certified under SM&CR.

Readers might take the view that this conclusion is pretty obvious. However, as is the case for many apparently simple questions, the FCA Handbook does not readily give up an answer. 

So it can be dangerous to make assumptions about such questions without actually following through the various rules and guidance that apply. In a perfect world, we would be able to look up Chapter X, Page Y of the Handbook where the specific question is listed with a clear and unambiguous answer. In reality, the relevant rules are often scattered throughout the Handbook and separate policy statements and guidance and require a degree of interpretation of ambiguous or apparently contradictory text.

ATEB prides itself on giving clear answers to regulatory questions, so we are always delighted to receive queries from our clients, even if it means we have to follow what can be a convoluted trail of rules and guidance to identify the correct answer.

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About the Author

Technical Manager - Often referred to as the Oracle or the Sage, Alistair has a wealth of financial services experience. He is our go-to Technical Manager and enjoys nothing more than a complicated conundrum. Feel free to test his renowned knowledge by getting in touch.

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