The proposed changes also include requiring transfer advice to be provided as a personal recommendation, and replacing the current transfer value analysis with a comparison to show the value of the benefits being given up.

The FCA consultation report stated: "It remains our view that keeping safeguarded benefits will be in the best interests of most consumers. However, the introduction of the pension freedoms has altered the options available and for some consumers a transfer may now be suitable when it wasn’t previously.

"We therefore propose to remove the existing guidance that an adviser should start from the assumption that a transfer will be unsuitable. This will be replaced with a statement in the Handbook that for most people retaining safeguarded benefits will likely be in their best interests and guidance that advisers should have regard to this.

"This will not require an assumption to be made by an adviser. An assessment of suitability should focus on whether a transaction is right for the individual and should be assessed on a case by case basis from a neutral starting position.

"The adviser needs to demonstrate that the transfer is in the best interests of the client."

The proposals include:

• replacing the current transfer value analysis requirement (TVA) with a comparison showing the value of the benefits being given up
• introducing a rule to require all advice in this area to be provided as a personal recommendation, which fully reflects the client’s circumstances and provides a recommended course of action
• updating FCA guidance on assessing suitability when giving a personal recommendation to convert or transfer safeguarded benefits, so that advisers focus on whether a transaction is right for a particular individual 
• introducing guidance on the role of a pension transfer specialist

Taken together as a package, the proposals will "ensure that advice fully takes account of an individual’s circumstances so that consumers make the right decision for them", the FCA stated.

Christopher Woolard, executive director of strategy and competition at the FCA said: “Defined benefit pensions, and other safeguarded benefits such as guarantees, are valuable so most consumers will be best advised to keep them.

"However, we recognise that the environment has changed significantly, so we want to ensure that financial advice considers the customer’s circumstances in full and recognises the various options now available to them.

“Our new approach should better equip advisers to give the right advice so that consumers make well informed decisions.”

The FCA stated: "Our new approach builds on the rules and guidance which are currently already in place for advice of this nature including our recent pension transfer alert.

"The clarity provided by this consultation should better equip advisers to give the right advice. This will help consumers make well informed decisions which consider all relevant factors to allow them decide whether or not to transfer. It will also give consumers confidence in the advice that is being provided, whether or not this results in a positive recommendation to transfer."

The FCA is inviting comments to be sent by 21 September.

It is seeking views on the following proposals:

• introducing a rule to require all advice on the conversion or transfer of safeguarded benefits to result in a personal recommendation
• updating and adding to Handbook guidance on assessing suitability when giving a personal recommendation to convert or transfer safeguarded benefits
• introducing Handbook guidance on the role of a pension transfer specialist, and amending the definition of a pension transfer specialist
• replacing the current transfer value analysis requirement (TVA) with a requirement to undertake appropriate analysis of the client’s options including a prescribed comparator indicating the value of the benefits being given up, and
• restricting the application of the additional requirements in respect of pension opt- outs to those cases where there are potential safeguarded benefits

The regulator also invited 'discussion' on a number of issues that relate to the transfer and conversion of safeguarded benefits, as shown below. But the report stated the FCA does not propose any rules at this time.
These were:

• the qualification and experience requirements for a pension transfer specialist
• the different models used for meeting the requirement for advice to be given or checked by a pension transfer specialist
• the use of models of future outcomes based on ranges of values (“stochastic modelling”) in advising on the conversion or transfer of safeguarded benefits
• the relationships between advisers and providers where providers make software available for advisers to use
• the current assumptions for revaluation and indexation used in analysing DB benefits
• the impact of the proposals on overseas transfers, and
• the application of streamlined advice for the conversion or transfer of safeguarded