Proposals to ban contingent charging for defined benefit pension transfer advice have been backed by financial services firm Aviva, with Chief Executive of Life Business at the company Andy Briggs expressing concern about the potential conflict of interest involved.
According to the Financial Times, Mr Briggs is particularly concerned that when contingent charging is in place, advisors only receive a payment if a transfer is made, which incentivises them to recommend such a move even if it is not in the interests of the customer. This could, he warned, further erode public trust in the financial services sector.
Instead, he said, a charge should be made for the advice, whether this involves a transfer or not. Mr Briggs concluded, "This will be a powerful way of making sure that only those clients that are genuinely interested [in the advice] engage with the process, and that would be an extra guard against any potential rogue advisers in this space."