Several players in the pension market are reporting a slowdown in defined benefit (DB) pension transfers, as bad publicity and an added level of scrutiny from financial advisers start to take effect.
Self-invested personal pension (Sipp) provider Curtis Banks, which currently administers 77,552 Sipps, has seen some slow down on defined benefit pension transfers in the first six months of the year.
Rupert Curtis, chief executive of Curtis Banks, said: "[Defined benefit transfers] have gone down in the market as a whole. There has been a lot of publicity around DB transfers and the market conditions have changed as well."
Will Self, deputy chief executive officer at the Sipp provider, added there was "a lot more nervousness" around DB transfers, which had pushed advisers to apply greater levels of due diligence as well.
He said: "That is where the knock-on impact happens for us in terms of our general new business."
However, only 15 per cent of new clients come from the DB space, with the Sipp provider focusing on defined contribution pot holders.
DB transfers have been in the spotlight due to issues with transfers out of the British Steel Pension Scheme.
Problems started after British Steel owner Tata Steel formed plans to merge with rival ThyssenKrupp and pension liabilities were rearranged as part of a regulated apportionment arrangement (RAA) signed off by the The Pensions Regulator in August last year.
As a result, steelworkers were given until December to decide whether to move their defined benefit pension pots to a new plan being created, BSPS II, or stay in the existing fund, to be moved to the lifeboat Pension Protection Fund.
The scheme had about 130,000 members of which 43,000 were deferred, meaning transferring out of their pension was an option for them.
FTAdviser reported in November that several steelworkers appeared to be transferring out of their pensions after being lured by cheap deals by unregulated introducer firm Celtic Wealth Management & Financial Planning, which then referred the clients to advice firm Active Wealth.
Dentons Pensions, which administers more than 6,200 Sipps, has also seen the inflows from final salary plans fall.
Martin Tilley, director of technical services at Dentons Pensions, said: "Our new business is around 15 per cent from defined benefit, and this has dropped marginally from last year.
"It is not a particular target for us and in fact around 40 to 45 per cent of our new business comes from other existing Sips."
Sipp provider James Hay has also reported a slowdown in the transfer market, which was responsible for a decrease of 20 per cent in the number of new clients during the first half of 2018.
According to data from the Financial Conduct Authority (FCA), £20.8bn was transferred out from defined benefit (DB) schemes during 2017, more than double the volumes registered in the previous year.
In October, the FCA revealed advice in more than half of the DB pension transfers where the recommendation was to move the retirement pot had been deemed unsuitable or unclear.
