Keep your business out the spotlight: an effective triage for DB clients


Recently, one of our PTS clients contacted us to say that they’d just had an FCA visit – and all was good. Interestingly, the one piece of remedial action required was improving the recording and reporting of their triage process to ensure it was recorded and that it was, in fact, non-advised.

It looks like the FCA are aware that many firms don’t have an audited process for their triage, which allows clients to choose advisers, rather than advisers to choose clients. As explained in the FCA’s consultation paper CP18/7, “Even if a client tells a firm about their personal circumstances, if the firm wishes to avoid giving advice it should not comment at the triage stage on whether they should consider a transfer based on this information”.

It is true that some firms do not look at personalised information at triage, and provide generic, balanced, factual information as part of an educational process. However, some firms may be tempted to treat triage as a client screening process, finding out what they can about the client and CETV to give an indication on whether the adviser thinks the transfer is a goer or a not, and deciding if/how to proceed on this basis.

Is it truly non-advised, educational, balanced, and recorded?

With personalised information being discussed, the adviser could easily stray into providing advice – either to transfer, or to remain in their DB scheme. This therefore presents a huge risk to firms taking this “personalised” approach to triage.

Providing an indication to the adviser of whether the transfer is a goer or not is not the point of triage. We believe that the FCA wants PTS firms to be clear about what they are offering clients through their triage service, prior to them undertaking regulated financial advice. Is it truly non-advised, educational, balanced, and recorded?

There are huge benefits of a triage service, because it puts you in front of educated, informed clients who understand the basics of the advice process, the risks involved in transferring, and that there will be a fee for the advice given. It de-risks your business, saves you time, and minimises the potential for future complaints as only those who understand and accept the risks of transferring their pension are going to be engaging with you. Additionally, you will have evidence that the client understood what they were doing when they transferred.

We believe triage should involve not only balanced, educational explanations of pension transfer concepts, but also some sort of test or quiz to prove that clients definitely understand. Otherwise, some potential clients may just nod along, not really listening, because their mind is already made up – they know they want to transfer their pension because Dave from the pub did it, and he says it would give better death benefits. And what’s best for Dave is best for me, surely?

So, how can financial advice businesses implement triage? In short, the options for firms are either to take responsibility for providing an in-house triage service, or outsource triage to a specialist triage provider.

While doing nothing is also an option (remember that triage is not mandatory) we would suggest this leaves your advice business open to huge risks compared to companies who do offer a triage service. But more than this, triage is about providing the best consumer outcomes – you will be dealing with the clients who want and value your advice, with evidence that they understand what they’re doing and the risks involved with transferring their pension.

Offering your own in-house triage may be an option for some firms, but we believe that very few will have the expertise or time to implement this efficiently. What are the time and financial commitments involved in training your staff sufficiently to educate clients adequately – without straying into advice – in a completely balanced and unbiased way, and ensuring the process is fully recorded?

Pension provider Royal London conducted a recent survey on adviser firms’ triage processes. It showed that more than two out of every three advice firms have a triage process for potential transfer clients. However, what was startling was that some firms reported no clients deciding to transfer post-triage, compared to more than 90% at other firms. This huge spread suggests that firms implementing their own effective triage is probably much trickier than some may think.

For many firms, outsourcing to a specialist triage provider will be the most cost-effective and business-efficient option. Expert Pensions Consulting offers a comprehensive triage service for clients comprising a series of short videos, PDF download supplements, and a short quiz. On completion, you as the Adviser get a PDF confirmation that can be added to the client’s file as a file note.

In short, Expert Pensions Consulting really does offer a great way of helping to ensure your PTS business is kept out of the regulatory spotlight, via what we believe to be the most comprehensive, client-friendly, recorded triage in the UK.


About Author

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Dubbed by friends and colleagues “The Pensions Professor”, John Reynolds is widely acknowledged as one of the country’s leading experts in the financial services education sector. He has spent 20 years teaching, consulting, mentoring and writing on the subjects of pensions and investments. John’s unique ability to take his years of experience and technical knowledge and present it in an easy to understand format, has resulted in his talents being very much in demand. His portfolio of corporate clients include CII, Lloyds, Scottish Widows, Santander and Wesleyan; as well as numerous IFA clients whom he provides technical consultancy, mentoring and training on client case studies and staff training.. He has put his extensive expertise (and heart and soul!) into developing the expertpensions (EPL) proposition. EPL is a structured and interactive technical exam training programme for IFAs. It's designed to give financial advisors the required technical knowledge, study strategy and exam technique to confidently sit and pass the AF1, AF3, AF4 and AF5 exams. Its online, it's fully supported, structured and designed to help advisers reach Chartered Financial Planner status quicker. It's ready to help your advisers reach chartered status

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