Pension Transfer Specialists: Definition, Qualifications, and How to Choose the Right One

The transfer of workplace pension (Final Salary or Defined Contribution) into personal pension (SIPP or QROPS) is an action that has become a trend throughout the years. Workers can get complete flexibility and control over their funds by transferring pension funds.

The regulations in the United Kingdom clearly state that a Pension transfer specialist (PTS) is required for all transfers equal to or more than £30,000. PTS is a UK licensed financial advisor with extra qualifications instead of a pension DB scheme.

Ideally, you use this PTS service for those of you who are planning to transfer your Final Salary to a Defined Contribution or other pension schemes. Before using PTS, the question that someone commonly faces is whether PTS services are expensive? Or, is the PTS price worth what you will get?

This content will discuss how one can become a PTS and why you need one. The discussion in this article also complements the explanation of Dominic James Murray, CEO of Cameron James, regarding PTS in the following YouTube video.

Why Does PTS Have to Be UK Licensed?

Many expats seek financial services from outside the UK because they feel they fit in. However, to take care of your retirement fund in the UK administration area, you require a UK PTS. The goal is to get more comprehensive assistance per UK regulatory conditions.

The Financial Conduct Authority (FCA) makes it mandatory for workers with a cash equivalent transfer value (CETV) of more than £30,000 to use PTS services as professional advice in terms of making financial decisions.

With regulations in the nation, UK licensed PTS will make it easier for workers to transfer their pension funds to another pension scheme. Furthermore, UK licensed PTS is the best solution to avoid the risk of transfer failure or misunderstanding of the rules.

What Is the Role of UK PTS in Moving the DB Pension Scheme?

UK PTS are people with the qualifications, understanding, and experience who are highly competent to provide pension fund financial advice. Various information and advice obtained from PTS will revolve around your annuity amount, taxes, and different financial data.

With your retirement financial information and data, PTS will provide considerations such as an explanation of the condition of the pension scheme, financial forecasts in the future, investment prospects, the UK economic situation, and much other advice. With a variety of information, data, considerations, and advice, PTS will do the calculations that are applied to whether you will make a pension transfer or not.

How Many Pension Transfer Specialists Are There in the UK?

Based on data released by the Financial Conduct Authority (FCA), from 2018 to 2020, 1521 firms had permits as DB advisors for pension scheme transfers. That number is likely to change in years as the need for pension transfer advisors evolves.

Although market demand is high, the change in the number of firms licensed as pension transfer advisors is not too significant. The difference in the number is not substantial because becoming a PTS takes a long time and requires various rigorous tests.

These various types of tests are intended so that financial advice regarding the transfer of your retirement funds is genuinely based on calculations and the best financial considerations.

UK TPS Qualification As per FCA Regulations

FCA explained that TPS are individuals who have passed a number of The Training and Competence Sourcebooks. After it, TPS must work in a company to give advice on pension transfers, pension conversions, and pension opt-outs or to check such advice according to COBS 19.1.

The trend of DB transfer pension schemes requires the FCA to issue several regulations and guidelines for providing financial advice to pension fund owners. The FCA regulations and guidelines enable the company to provide the best and most appropriate advice for your circumstances.

Several essential qualifications that a PTS must possess are having to pass numerous qualifications, namely CISI (The Chartered Institute for Securities & Investment) exams. CISI exams consist of:

  1. Take at least 3 exams to get RDR Level 3 qualified status
  2. Minimum 1 exam to get PTS Exam level 6 status

The CISI exam can only be taken if the candidate has met the FCA qualifications related to regulations and ethics, investment and risk, and retirement planning. So, the candidate can get status in the Statement of Professional Standing for Retail Investment Products.

UK TPS Qualification As per FCA Regulations

There is no specific benchmark for you or your workers to determine the best PTS. Moreover, the small number of PTS in the UK makes this profession a target for many people.

However, you can use the FCA guidelines as a benchmark for choosing PTS that work according to regulations and match your retirement conditions.

The considerations below are some FCA guidelines that PTS should follow when reviewing and providing advice regarding pension fund transfers:

  1. Obedient to Section 48 of the Pension Schemes Act 2015
  2. Recommendations based solely on critical yield
  3. Permission and responsibility for the advice
  4. Willing to liaise with foreign advisers if needed.
  5. Have alternative advice apart from pension transfer
  6. The advice given is based on the personal condition of each pension recipient

Of course, you can only get the FCA practice and guideline information above if you have already contacted PTS. Therefore, you can decide a company that provides free consulting services at the start. With a free consultation, you will find out how far PTS will take your information and how it will explain the best advice for you. That’s when you can get a PTS projection that is suitable and professional according to your needs.

Cameron James is a qualified, trusted and experienced Pension Transfer Specialist with more than 10 years of experience in the UK Pension Transfer industry. Our expertise served UK expats across 23 countries and 6 continents. Let us help you to decide on your UK pension transfer business and make the right financial decisions that are tailored to your situation and risk profile, through a free initial consultation below.

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