Top tips for Trustees to consider when choosing a regulated financial adviser.

WEALTH at work

Whilst freedom and choice brings much more flexibility for pension scheme members, the downside is that without sufficient knowledge, it can be easy for them to make poor decisions which can create a permanent dent in their retirement income. This could include paying more tax than necessary, underestimating how long their retirement savings will need to last, falling victim to a scammer or making ill-judged investment choices.

Trustees are currently under no legal obligation to provide access to regulated financial advice to its members. Some schemes offer basic information on how their members can find an adviser but do not provide any support in assessing the suitability of any given adviser. The downside of this became very clear in the British Steel fiasco when members were left to their own devices to find an adviser with many being ill-advised at best or scammed at worst.

For a long time there has been a concern by many Trustees that helping members gain access to advice carries risk for the Trustee. However, a discussion paper from Eversheds Sutherland and Royal London suggests that this theory only looks at ‘the risk of doing something and not at the risk of doing nothing’. It highlights that simply referring members to a list of advisers for them to choose from can lead to significantly poor member outcomes and therefore member distrust. In some cases, this can lead to reputational damage, as seen with British Steel.

If done correctly, facilitating access to regulated financial advice does not carry the risk many presume.

To help Trustees who are thinking of facilitating regulated financial advice to its members, WEALTH at work has provided its top tips to consider when choosing an adviser:

  1. Check whether the firm is regulated

Before a Trustee approaches any advice firm, they should check the company is registered with the FCA first via This will confirm whether the firm is regulated and also if they are authorised to provide specific advice such as pension transfers.

  1. Research their experience

Checking a firm’s experience will help determine whether their advisers will be a good fit for scheme members. For example, advisers with workplace experience will be familiar with various types of occupational pensions and will have knowledge of other workplace benefits.

  1. Ask around

Speaking to other schemes using their services will give an unbiased view of the firm and looking at member feedback will help measure the quality of the advice given by the firm’s advisers.

  1. Review their compliance process

Checking whether the firm has a robust compliance process in place will help ensure the quality of advice given to its members. For example, does the advice firm’s compliance check 100% cases before they proceed?

  1. Check their pricing structure

Requesting a breakdown of costs for the types of advice available will help Trustees ensure the costs are competitive for their members.

Jonathan Watts-Lay, Director, WEALTH at work comments:

Many Trustees have concerns over helping members gain access to advice but with many members at risk of falling victim to scams and fraudsters, they would benefit from help finding a reputable adviser. Having access to an adviser that has been vetted by the Trustee not only provides security, but the adviser will be more familiar with the structure of the scheme to provide a better quality of advice for members.”

He concludes: “If an adviser is introduced to a scheme after a thorough due diligence process, Trustees can feel confident that the responsibility for the regulated financial advice given to members, and the consequences of that, rest with the chosen provider and not the Trustee.”

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