Was my client’s defined benefit transfer suitable?

This is a very complex question, and it is one where the Financial Conduct Authority requires the assumed answer to be “no” unless properly justified. The advice itself must be provided by a suitably-qualified pension transfer specialist, which typically means holders of the AF3 or AF7 qualifications with the Chartered Insurance Institute or the equivalent from another awarding body.

It is important to consider the client’s circumstances and objectives very carefully when deciding whether a pension transfer was in their interest or not. A recommendation to transfer should be accompanied by a cash flow forecast with a stress-test of the transferred portfolio and a comparison between the retained pension and a transferred balance to a point long after life expectancy (typically I use age 100 for any client under 90, as this comfortably exceeds the expected life remaining, but if both parents lived to 110, it may be appropriate to extend this further).

Cases involving pension transfers are the most complex that it is possible to advise on from a regulatory perspective, so it is impossible to have hard and fast rules on whether a case was correctly advised.