Fri, Jun 5, 2020
The FCA has set out a package of measures aimed at addressing weaknesses across the defined benefit (DB) transfer market, which include the following:
The new rules banning contingent charging are set out in Policy Statement (PS) 20/6; “Pension Transfer Advice: Feedback on CP 19/25 and our final rules and guidance”. Other measures set out in the Policy Statement include;
The FCA is also consulting on guidance on what it expects from firms when advising on pension transfers and conversions, particularly from DB schemes to defined contribution (DC) schemes. This Guidance Consultation (GC 20/1), “Advising on Pension Transfers”, sets out best practice and case study examples of suitable and unsuitable advice. The FCA is also seeking views on a scheme data template and an updated version of the jointly branded FCA/The Pensions Regulator factsheet for employers and trustees on providing support on financial matters.
Christopher Woolard, Interim Chief Executive, said “The proportion of customers who have been advised to transfer out of their DB pension is unacceptably high. While much of the advice we looked at was suitable, we are still finding too many cases in which transfers were not in the customer’s best interests. The steps we are announcing today will drive up standards.”
The full press release can be found here and the update on the FCA’s ongoing work can be found here.
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