PI Insurers on High Alert for Pension Transfer Advice
Within the Professional Indemnity (PI) Insurance market, it is a common occurrence for Insurers to ask IFA’s to supply data relating to their pension transfer related activities at renewal. This data, collected alongside other information, was part of the usual information gathering process to allow the insurer to understand the advice profile of the firm. Over the last 12 months the landscape has shifted considerably. Instead of pension advice statistics being a background item for an underwriter they are now front and centre, as a key influencer as to whether they actually put up terms at all.
Whilst Pensions Freedom has on the one hand created an opportunity for IFAs, as clients have more choice to change their pension arrangements, on the other it has created a significant risk exposure in the eyes of insurers. IFAs appear to be polarised on the matter since the introduction in April, with some assisting their clients to take advantage of the new rules whilst others are steadfastly refusing to transact the business, especially in the case of defined benefit transfers, even if it means losing the client