Where are we now?
The FCA has recently published updated findings with regards to its investigations conducted with firms providing pension transfer advice. These investigations extended to a further 45 firms and visits to 18 of these companies. These 18 firms gave advice to 48,248 clients about their DB pension schemes, which resulted in 24,919 pension transfers since April 2015. Following this, some of the providers varied their permissions and ceased giving advice in this area, although they were a minority of the sample. The regulator reviewed 154 transfers in detail, and the outcomes are shown in Chart 1.
Previous reviews of a similar nature saw more transfers that were clearly unsuitable and fewer that were unclear, with no material change in the amount deemed suitable. But what we can take from the latest review is unclear, as we do not know how the firms were targeted.
It is clear that the FCA is still not comfortable with much of the advice being given in this area, so we expect to continue to see scrutiny of the market and the professionals providing advice. Persistently high transfer values will mean the appeal of transfers isn’t going to go anywhere soon, so they will stay high on the regulator’s radar for the foreseeable future.
What we don’t want to see is the return of the assumption that all pension transfers are unsuitable, as the majority of advisers are doing great work in this area helping their clients to make the right decisions.
Claire Trott is head of pensions strategy at St James’s Place Group
