Switches

Switches

Switches

Switching from one investment to another

 Tuesday, 26th August 2014

This is a generic term used to describe a switch from one investment to another. This could be an investment fund switch, an investment policy switch or a pension switch.

When it comes to pensions however, advisers can get confused between what constitutes a pension switch and what is a pension transfer.

To clarify therefore, a pension switch is where a retail client is transferring benefits from a personal pension or stakeholder pension scheme (where there has been no previous transfer from a defined benefits scheme) to another personal pension or stakeholder pension scheme.

There is no specific qualification requirement for advisers advising on pension switches.

FCA guidance can be accessed here

http://www.fca.org.uk/firms/financial-services-products/investments/pension-switching

Suitability reports must contain sufficient detail to justify any switch, including alternatives, disadvantages, risks, costs and charges.

(Now read ‘T’).

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