March 23, 2024

Advisers will need to manage client expectations, as the latest anti-scam transfer rules are likely to make small-self administered scheme processes “considerably more drawn out”. 

The new rules, which came into force at the end of November, are likely to have a big impact on Ssas’s, according to Martin Tilley, director and head of technical and compliance at Westbridge.

Clients wishing to transfer their pensions into a Ssas, or even other pension wrappers, could have “painful times” on their way, Tilley warned.

This is because ceding schemes will be able to determine or interpret their own criteria for flagging a transfer and triggering a referral to the MoneyHelper service which could then end up overrun with requests.

Potential triggers for flags could be ‘high risk investments’, defined simply as ‘high end of the normal range of risk in the current financial market’, Tilley explained.

This could cause particular issues for Ssas’s.

“Let us suppose that the transfer is to a Ssas where the funds are intended to be invested in a commercial property, leased to a connected third-party tenant, and offering a yield of 8 per cent per annum,” Tilley said. 

“Will the ceding scheme trustees be forensically examining the financial strength of the tenant and therefore the security of the tenancy and therefore the yield? Will the trustees have sufficient market knowledge of the industry and the expertise of the tenant in the market in which they operate. And will the costs of…

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