Third of trustees facilitating financial advice

Over a third (34 per cent) of defined benefit pension trustees have taken steps to facilitate reputable financial advice for their members, Hymans Robertson has found.

In its Evolution of Member Options report, Hymans Robertson found that this trend is likely to increase in the future, as a further 11 per cent of trustees have plans to facilitate advice for members in the next 12 months.

Furthermore, around a quarter of trustees currently contribute towards the cost of financial advice for their members.

“Financial advice is complex, but crucial for members,” commented Hymans Robertson head of member options, Ryan Markham.

“Without it, they are, at best risking sleepwalking into retirement and, at worst they’re in danger of getting picked off by scammers.

“We know that a DB pension is now likely to be an individual’s most valuable asset, more so even than a property. This intensifies the need for quality, trusted advice to be available at the point of retirement.

“By facilitating or contributing towards the cost of this, trustees can help ensure that their members’ retirements are in trusted hands.”

Hymans Robertson's report also found that 75 per cent of DB scheme trustees are enhancing their communication and engagement strategy.

It argued that, although trustees and sponsors may be concerned about the risks of members coming back to blame them if something goes wrong, this can be mitigated through formal ongoing monitoring of the adviser, including member engagement and take up rates.

Markham continued: “Regardless of how active an approach a scheme takes to member options, at some point their members are going to want to talk to someone they can trust about the choices they have.

“While trustees are often concerned that facilitating this advice will open the door for members to reappear years later looking for someone to blame, recent headlines have made it clear that the risks attached to doing nothing and leaving members to fend for themselves are far greater.”

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