Advisers see Defined Benefit (DB) transfers as forming a key part of their businesses in the future, according to new research from FundsNetwork.

The research also found that despite seeing DB transfers as having potential to grow their businesses, many advisers are concerned about the impact of legislation in the future.

Of the 222 advisers questioned in March 2017, 70% said that with valuations rising and more people with DB schemes reaching retirement, had the potential to form a greater part of advisory business in the future.

However, 64% of that group said they are worried about retrospective legislation and how this could affect them in future.

Richard Parkin, head of pensions policy at Fidelity International, said while transfers presented an opportunity for pension scheme members and for advisers, regulatory risks should be taken into consideration.

"With valuations riding high, DB schemes have been in the news as people explore whether transferring out is a good idea," he said.

"For advisers, it's clear they see a real opportunity to help their clients, but are understandably concerned about unforeseen problems down the line.

Parkin added that good advice is essential and called for more information from the Financial Conduct Authority (FCA).

"There's no doubt a transfer will in some people's interests and a well-structured advice offering is key to help them look at that – but the regulatory risks around this business are high.

"While the FCA has provided some helpful commentary on this recently, we'd like to see more from them on this subject," he said.

The fears around legislation could be putting off new entrants to the market, according to the research, which found that of the advisers who refer clients requesting DB advice to a qualified person, 74% believe the area can only grow.

Despite this, however, advisers in general have no plans to upskill to offer this advice themselves, with more than half (58%) citing their concerns around changes to legislation.

Parkin said: "As well as giving advisers more confidence to step in and meet the sharp increase in demand for this service, a clearer regulatory position could also help reduce professional indemnity costs for advisers which are a significant impediment to many being able to offer advice at affordable levels."

First published 23.05.2017

Lindsay.sharman@wilmingtonplc.com