Pension transfer – know your adviser


Finding the right advice on pension transfers can be intimidating. There are many websites and advice companies promising you the best deal, but few explain in any detail where they sit in the financial services industry, why their advice is best and what you will get for your fee.

In a world of scams, unregistered advisers and copycat websites, I think it is of paramount importance to be fully informed about who you are speaking to about your hard-earned pension.

First and foremost, you need to confirm that the financial adviser you are speaking to is registered with the Financial Conduct Authority (FCA). It may come as a shock, but anyone can call themselves a financial adviser or financial planner.

There are two quick ways to check this out:

  1. All registered advisers must show their status at the bottom of their business cards and headed paper. And whilst not compulsory to show this status on a website, almost all do. If you look at our website you will see the type of statement.
  2. The FCA register should have the adviser name on it or the company they represent. All registered advisers have an individual FCA number Daren’s is DXW00179. You can check the FCA register at

Final salary transfer advice on pension funds over £30,000 must be carried out by an FCA-registered pension transfer specialist. Even then, it is possible that a registered adviser could recommend that the proceeds of a pension transfer are reinvested in a vehicle that is not FCA regulated. At Ginkgo, we only deal with FCA-regulated pension investment funds.

Once you are happy the adviser is registered, you need to give careful consideration to the following three areas:

An entry level adviser is called a Diploma Level 4 adviser. There are about 30,000 of these in the UK.

The next level up is a Diploma Level 6 adviser. They have double the professional qualification credits of Diploma Level 4. This is generally called the advanced qualification.

If this adviser also has a good level of industry experience – five years or more – and sticks to a code of ethics, they can become a Chartered Financial Planner. There are about 6,655 Chartered Financial Planners in the UK.

Fellows of the Personal Finance Society are the most highly qualified advisers of all: an adviser will need to earn around 20% more professional qualification credits to achieve this status. There are about 2,876 fellows of the PFS.

(These figures only relate to the Chartered Insurance Institute and the Personal Finance Society. Other professional societies within the financial services industry have equivalent qualification levels.)

Market Position
Financial Advisers are split into two market positions.

Whole of market
This is what is known as an independent financial adviser. A whole of market adviser must consider all providers and can use any of them to implement their advice (although they must have no other relationship with that provider). This vast choice can make it difficult for an adviser to have detailed knowledge of every provider’s product. And with clients spread around many providers, smaller advice firms’ business relationships with individual providers may be limited – generally, to telephone-only support.

The majority of advisers sit in this category. Restricted advisers offer a selection of carefully curated providers who are divided into two panels: one of pension administration companies, and one of investment companies. A restricted adviser will choose one provider from each panel, mixing and matching according to their client’s needs. (It’s worth noting that the investment companies on a panel can themselves be either whole of market or restricted when it comes to selecting investments, so going down the restricted route need not limit access to funds, commodities and equities.)Because restricted advisers only deal with a selection of providers, they may be more knowledgeable about the providers’ products and have better relationships with them. Providers are obviously very keen to get and stay on a panel supported by a large network of advisers and they cut their margins and improve their client offerings accordingly. As an example, one panel provider charges our clients 40% less in fees on a £500,000 investment over their open market rate. This saves clients over £500 per year.

Ginkgo’s panel of pensions administration companies currently comprises AEGON, LV, Old Mutual: all of whom offer transparent online platforms that allow our clients to track the performance of their investments. We also use SIPP providers such as AJ Bell, InvestAcc as well as others.

Our investment company panel currently includes Invesco, Cirilium, Vanguard, Premier, Blackrock and Jupiter. In total, we use over 25 investment companies, selecting the final company based on our client’s requirements for charges, risk level, active or passive investment management, and approach (whole of market, restricted or sector based). All investment companies are reviewed quarterly to ensure they continue to comply with these criteria.

For larger investments (in excess of £250,000), we also have a panel of discretionary fund managers made up of Quilter Cheviot, LGT Vestra and Rathbones, who we are able to use these where appropriate for our clients.

Client protection
There are two routes that advisers can take to meet FCA regulations. The route they choose has a major impact on your protection in the event of bad advice.

Directly regulated
Ginkgo Financial Ltd is an appointed representative of Quilter Financial Services Limited and Quilter Mortgage Planning Limited, who are authorised and regulated by the FCA.

The first port of call for a complaint would be to the adviser firm themselves. If they will not agree to settle a claim for bad advice, it is referred to the Financial Ombudsman Service (FOS). Should a claim be successful, the FOS will stipulate an amount of compensation. This can be paid either by the adviser or via the adviser’s Professional Indemnity (PI) insurer.

However, PI cover doesn’t necessarily provide clients with total peace of mind. Policies can have high excesses, which advisers may not be able to meet, and maximum compensation amounts may be lower than the amount set by the FOS. Most importantly, cover is only valid if the adviser has a valid PI contract in the year of claim, not the year of advice. With medium and long-term investments, most claims are in the years after the advice was given. Therefore, there is no guarantee the adviser company will still have PI cover. In many cases, bad advice is not limited to a single case but endemic across an advice company: firms that can’t afford multiple compensation payments have been known to go out of business to escape their liabilities. In 2017, over 100 small advice firms liquidated without paying compensation, most of which related to bad pension transfer advice.

Where this happens, clients are referred to the financial services compensation scheme (FSCS), which limits compensation for investments to £50,000. For more information see

Advice Networks
Most networks are owned by large financial institutions; for instance, Ginkgo operates within Quilter Financial Planning Limited and Quilter Mortgage Planning Limited. Networks impose tight regulatory controls on their advisers: both for their clients’ and their own protection. In theory, this provides an extra safeguard against bad advice. But, if you were to be wrongly advised, it’s reassuring to know your adviser is backed by an institution with both the financial means and will to meet their compensation obligations.
This was demonstrated at the network Sesame, which was owned by Friends Life/Aviva. When endemic bad advice was uncovered, Aviva paid out £100s of millions in compensation to clients to put the matter right.
The industry-wide Financial Ombudsman and Financial Services Compensation Scheme are still available to clients of networks. We are not aware of any FOS decision that was not complied with by a network.

Ginkgo Position
At Ginkgo, we strive to achieve the best possible outcome for every client, and I believe that our position plays a vital role in that.

  • As a Chartered Financial Planner and Fellow of the Personal Finance Society, I hold the highest level of professional qualifications in the industry.
  • Our position in a restricted marketplace gives you access to competitively-priced, high-quality products.
  • You have the reassurance of knowing that our advice is backed by one of the largest and most financially-secure networks in the UK.

The value of pensions and investments can fall as well as rise, you may get back less than you invested.

Transferring out of a Final Salary scheme is unlikely to be in the best interests of most people.

By Daren Wallbank, Chartered Financial Planner, Fellow of the Personal Finance Society and Director of Ginkgo Financial Ltd