The insurer said that the new service is expected to help in bridging the advice gap in the UK
Aviva introduces abridged advice service for defined benefit pension transfers in the UK. (Credit: Colin / Wikimedia Commons / CC BY-SA 3.0)
Aviva said that its financial advice arm has launched an abridged advice service for people looking for advice for their defined benefit (DB) pensions in the UK.
According to the insurer, the new service will help in bridging the advice gap in the UK. As per a research report from the UK’s Financial Conduct Authority, more than 30% of adults in the country, aged 55 years or more, need financial advice but do not get it.
Aviva said that its abridged service will focus on planning and also completely understanding customer requirements. This will help them make an informed decision if they need to move ahead to full advice.
Aviva financial advice managing director Mary Harper said: “Previously, if someone came to us to ask about the suitability of transferring their DB pension, they would have to go through the whole advice process even if the recommendation at the end was not to transfer.
“Offering abridged advice means we can take customers through a much simpler process to understand if transferring is not the right thing for them in the first instance.
“More broadly, we understand the different levels of support that people need – from information gathering to full advice – and we’re tailoring our proposition so that a broader set of customer needs can be met.”
In June this year, the FCA unveiled new measures for improving the defined benefit pension transfer market.
Among the measures to be taken up by the regulator is allowing advisers to offer an abridged advice process for helping consumers get initial advice at a more affordable cost.
As per the regulator, the result of an abridged process should only be a recommendation not to transfer or a statement mentioning that it is not clear if a consumer would benefit from a pension transfer without giving full advice.
The FCA also said that it will ban contingent charging in most circumstances, which will remove the conflicts of interest that result when a financial adviser only gets paid if a pension transfer goes ahead.
Harper said: “Customers need advice on their DB pensions in order to be able to properly review the whole of their wealth and retirement strategy.
“It is an incomplete picture without considering what is the best choice for them if they have a DB pension as part of their retirement savings.”