A freedom of information (FOI) request from consulting firm, Buck, has revealed that the Financial Conduct Authority (FCA) wrote to more than 1,800 advisers about the potential for harm from defined benefit (DB) pension transfer advice.
The regulator’s move follows a survey of IFA firms active in the DB transfer market, which it undertook in June 2019. This revealed that much of the advice on offer was ‘not of an acceptable standard’.
The FCA’s investigation showed that around seven out of ten of DB scheme members who went to IFAs for advice were recommended to transfer out of their schemes. The FCA said it was concerned that too many advisers were recommending that clients went ahead with transfers.
Now Buck’s FOI request reveals that the regulator wrote to 1,841 of the 2,426 advisory firms providing DB transfers to set out the actions the firms should take.
“This latest information from the FCA is alarming and should worry all involved – providers, advisers, and scheme members. If the FCA fears that the majority of firms advising on DB transfers are giving potentially harmful advice, there are some serious questions to be asked of the industry,” said Mark van den Berghen, Principal and Senior Consulting Actuary at Buck.
James Burgoyne, Director – Claims & Technical, Brunel Professions said: “Professional indemnity insurers are already wary about insuring some IFAs offering DB pension transfer advice and this information will not help. Any firm active in DB transfers which is concerned about its PII can contact us for information about the cover available.”
Categorised in: Financial Services PI News
This post was written by James Burgoyne