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New pension transfers qualification


Publication date:

14 July 2017

Last updated:

15 March 2019

We're preparing the launch of a new pension transfers qualification following the Financial Conduct Authority's proposals to tighten the advice requirements for the transfer of safeguarded benefits.

The Level 4 Certificate in Pension Transfers Advice includes a new Level 6 unit (AF7) Pension transfers - which will open for enrolments in August 2017 - and three existing CII Level 4 units - (R01)Financial services, regulation and ethics, (R02) Investment principles and risk and (R04) Pensions and retirement planning.

Managing Director of Engagement and Chief Executive of the Personal Finance Society, Keith Richards, welcomed the FCA's proposals and said the CII would work closely with the regulator to ensure pension transfer specialists were equipped with any new qualification and knowledge requirements resulting from the current consultation:

"The transfer of safeguarded benefits is an increasingly complex area, and so in the interests of consumers and the advice profession, we support the FCA's renewed focus on the qualifications, experience and continuing professional development requirements for pension transfer specialists. We are committed to delivering the in-depth knowledge and practical skills required by those seeking to advise on pension transfers, an increasingly important part of the advice process following the Government's pension reforms. Our new dedicated pension transfer exam unit is client focused, and has been developed in the spirit of the FCA's current consultation, which we will formally respond to."

The launch of th e new qualification follows the FCA's warnings earlier this week that withdrawing money from pension pots had become "the new norm" following the pension freedom reforms of 2015. The regulator's interim findings of its Retirement Outcomes Review found that just over half of over-55s had fully drained their pension pots, while 30% of consumers go into drawdown without getting guidance. That compares with just 5% before pension freedoms.

Mr Richards said:

"The FCA has identified a range of possible measures to address some of the emerging issues including implementation of additional protections for consumers who buy drawdown without advice. We welcome the FCA's renewed focus on the evolving retirement market, and will work with regulator to secure an appropriate balance of consumer protection and freedom of choice. Appropriate advice requirements will form an important part of the solution, and our new qualification will ensure advisers are well placed to support consumers seeking financial security in retirement."

Some 7,000 CII SPS holders are qualified to provide pension transfer advice, holding either withdrawn CII unit (G60) Pensions or current CII unit (AF3) Pension planning. The new Certificate provides advisers with the skills and qualifications required to operate as a pension transfer specialist.

Advisers who hold the CII Diploma in Financial Planning, but not G60 or AF3, will simply need to complete AF7 in order to become qualified pension transfer specialists. AF7 involves 50 fewer learning hours than AF3 given its specific focus on pension transfers. Current holders of AF3 or G60 will also benefit from undertaking AF7, by developing their knowledge in the specialist area of pension transfers.

We will also introduce a new Level 6 Advanced Diploma unit (AF8) Retirement income planning in October 2017, covering aspects of pension planning not covered in AF7. Together, the two new units will replace AF3, which will be withdrawn in April 2018.

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This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.