National advice firm True Potential has handed out leaflets advertising its final salary transfer service to members of the British Steel Pension Scheme (BSPS).
The BSPS scheme, which includes many workers in the Swansea and Port Talbot area, is at a crucial point. Around 40,000 members have a deadline of 11 December to choose if they go into the Pension Protection Fund (PPF) or the new BSPS scheme which has less generous indexation than the original scheme.
These members also have the third choice to take a defined benefit (DB) transfer and this has sparked a number of advisers to visit the Port Talbot area trying to offer members transfer advice.
The marketing and direct approaches by some advisers has prompted criticism. The pension officer at trade union Prospect, Neil Walsh, recently told New Model Adviser® he was concerned at the ‘great efforts’ some are going to.
On Twitter one BSPS member has pointed to a leaflet being distributed to members outside pension road show events, held by the scheme for the benefit of BSPS members.
The leaflet contains a link to myfinalsalarypension.com/tata – a domain name owned by True Potential.
The link directs users to a True Potential site dedicated to the BSPS.
‘As well as the two choices on offer to you, you may benefit from transferring out of your final salary pension. There will be some valuable guarantees included within your occupational pension, we will assess whether it is beneficial for you to transfer,’ the site says.
‘With our pension assessment service, we can tell you if it’s in your best interest to consider moving your pension.’
It goes on to list three options available to members and presents three reasons why transferring could be beneficial: high transfer values, flexible payments and for inheritance planning.
There is no suggestion using leaflets to promote advisers’ own DB transfer service is against Financial Conduct Authority (FCA) rules. However the leaflet prompted one Twitter user to describe it as ‘factory-gating’, a term used to describe touting for business outside of a particular place of work.
Paul Stocks, director of Doncaster-based Dobson & Hodge, said leafleting can be a good way to get across messages to members about their options to transfer as long it is done properly.
‘Leafleting is not something we would engage in but the danger is if someone is not aware of their options they might have missed the opportunity to transfer out, and if that is the right thing for them to do arguably it [the leaflet] served them a benefit. I think it is all about the tone and how neutral is it,’ he said.
‘To be fair there is enough dialogue going on at the site, certainly in Scunthorpe, I don’t think people need to be leafleted to be told about [a transfer].'
A True Potential spokesman defended its marketing, commenting it wants to help members know all the options available to them.
‘People have much more freedom and choice over how they access their pension so it’s right that they have all the options clearly presented to them by qualified professional advisers. As one of the biggest advice firms in the UK, we are helping people make an informed choice and providing them with suitable advice where they ask for it.
‘That is exactly what is needed to make these freedoms work as intended and has been widely welcomed. For some people, a transfer is the best option but it may not be for others. True Potential only recommends a transfer where our qualified specialists are satisfied that it is the right course of action for the client.’
According to a Financial Times report, around 1,700 have transferred out of the BSPS so far out of 11,000 who have requested transfer value requests.