Essentially the FCA’s policy statement, “Advising on Pension Transfers”, makes it clear that the FCA wants to see more in depth analysis and evidence that all income opportunities have been considered by the client before going through with an occupational pension transfer.

Transfer Value Comparator (TVC)

A TVC demonstrates the cost of buying the equivalent scheme benefits in today’s money.  The FCA has mandated the format and content of TVC in their Policy Statement “Advising on Pension Transfers”.

Income Modelling

Cash flow or income modelling analysis has become a standard part of the planning process in the last year or so as it demonstrates to clients the most efficient way to use their savings.  A transfer is a major undertaking and takes time.  Often clients want to release cash for a particular purpose and may not realise that there are other alternatives to meet their objectives.

Lifetime Allowance

With any income model, wealthier clients will need to consider the impact of their Lifetime Allowance on their income.  This is a complex calculation as it depends on when the client took out protection and whether they took out a primary or enhanced plan.   Selectapension’s unique Lifetime Allowance calculator uses a multiplying factor to work out the notional value of an occupational scheme and then increases the LTA each year by the rise in the CPI as set out by the regulator. This calculator helps avoid any previously unseen issues which may affect taking benefits later, where the unwary could take a tax hit or reduced pension.

The whole solution – APTA with TVC

Selectapension has added a TVC to its pension transfer analysis tool, APTA with TVC.

The analysis appears towards the beginning of the client report produced by the tool and it complies with the FCA’s requirements regarding format and content.

The tool also includes a unique Lifetime Allowance calculator feature and income modelling functionality.

This single tool builds the full picture, meets the regulator’s requirements and helps advisers determine the best way to meet their clients’ objectives.