Pension experts, including the former Pensions Minister have backed the scrapping of ‘outdated’ guidance on DB transfers, saying that change was “long overdue” and the regulatory framework was “past its sell-by date”.

The FCA revealed plans for changes on DB transfer advice, including scrapping guidance that the adviser should start from the assumption that a transfer will be unsuitable.

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.

Baroness Ros Altmann and Keith Richards, CEO of The Personal Finance Society, were among those to back the FCA’s planned reforms, announced yesterday.

Baroness Altmann said: “The Regulator is rightly recognising that the case against transferring out of guaranteed employer schemes has radically changed. Each case should be considered individually to assess the benefits and risks for that person.

“In the old regime, the regulators rightly warned strongly against advising anyone to transfer. Indeed, financial advisers often refused to do the transfer for clients still wanting to after being advised against it. But the pension freedom reforms mean this attitude is outdated.”

Claire Trott, head of pensions strategy, Technical Connection, said changes to DB guidance had been “a long time coming” and an “overhaul of Transfer Value Analysis is long overdue”. Read her column, analysing the changes in full, tomorrow.

Rachel Vahey, product technical manager at Nucleus, said: “The current regulatory framework is past its sell-by date, and we welcome FCA's consultation on how to update it.

“Updating the transfer value analysis requirements is a necessity to bring it into the 21st century and we welcome the fact the FCA is looking to replace this with something more focussed.”

She said: “Defined benefit transfers are quickly edging to the top of the financial planning agenda, thanks to a heady mix of high transfer values and consumer desire for flexibility.

“Whatever emerges needs to be a robust system designed for the long-term, not just in response to these extraordinary times. Good financial planning is at the heart of defined benefit transfer advice, but the regulatory framework also needs to be fit for purpose.”

Brian Thorne, associate at Barnett Waddingham, said: “Given the current level of defined benefit transfer activity and associated regulated advice requirement, we welcome the FCA‘s announcement relating to the review of the rules for advice on the conversion, or transfer of safeguarded benefits.

“Advisers are in an ideal position to help members understand the genuine risks of pension related scam activity and help them avoid such arrangements.

“Updating FCA rules, as well as providing additional guidance of FCA expectations, should ensure advisers understand their role and accountability when assisting members make such important decisions.”

PFS chief Keith Richards, chief executive, said there were “some sensible proposals” which were a “critical first step” and could help to resolve the insistent clients problem.

He said: “The decision gives much needed clarification to advisers and their clients to examine each situation according to its individual merits, and also helps to allay advisers’ concerns over retrospective retribution.

“The requirement to disclose a Transfer Value Analysis statement is a good step but on its own is not sufficient, and we welcome the fact that this must be combined with the other proposal mandating a personal recommendation in every situation to ensure that the nuances that sit underneath the TVA can properly explained.”

He backed a review of the need for pension transfer specialists who are not qualified professional investment advisers and vice versa.