The specialist international pension transfer unit owned by London-headquarterd AES International has decided it is too risky to work with overseas investment advisers going forward due to the growing regulatory pressures in the UK defined benefit (DB) pension transfer market.
International Pension Transfer Specialists (IPTS), the business-to-business transfer unit, said it has launched a division that will help overseas advisers with all matters to do with DB and defined contribution (DC) pensions on an introducer-only basis.
“While an initial (up to 3%) and ongoing (up to 0.5%) fee is payable to the introducer where agreed by the client – the ongoing investment advice and client communication/relationship for this area will come from ourselves,” IPTS said in a note to advisers.
“Existing and new business may be introduced to our chartered financial planners with immediate effect,” the company added.
Regulations change business model
Sam Instone, chief executive of AES International told International Adviser: “Given the political and regulatory scrutiny of DB transfers – it no longer makes sense for IPTS to work with overseas investment advisers.”
He said this was because the advisers could potentially switch investments, post transfer, into offshore life insurance company bonds, structured products and other esoteric investments.
“The typical commission rates, lack of flexibility and high-risk nature of certain investments used by many overseas advisers means the risk of future client detriment within these critically important parts of retirement planning is, in our view, too severe in the wake of recent pension scandals such as British Steel.
“We are therefore very pleased to launch an introducer-only service for international advisers who think someone has a genuine reason for considering a DB transfer,” he said.
Instone said he expected IPTS to see ongoing demand for its service coming mainly from UK fee-based planners, lawyers, trustees and accountants moving forwards.
