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FCA: Our job is not to please everyone on DB transfers

David-Geale-700.jpg
FCA director of policy David Geale

FCA policy director David Geale says the watchdog’s role is not to “please everyone” but to ensure consumers get suitable advice for defined benefit transfers.

In its policy statement on transfers published today, the regulator stops short of a contingent charging ban and raises the qualification level for pension transfer specialists.

The statement says opinions were divided on a ban, with a small majority of respondents arguing against it.

The regulator says it is difficult to show a direct link between unsuitable advice and firms using contingent charging models.

Speaking to Money Marketing, Geale points out contingent charging is a sensitive topic and so the FCA must consider any intervention carefully.

But he also indicates the FCA will not hesitate to intervene if it finds there is evidence contingent charging is detrimental to consumers.

He says: “First things first it is not our role to please everybody. Our job is to ensure consumers get suitable advice.

“If we find through further work there is evidence linking contingent charging to unsuitable advice then we will act but it has to be in a balanced way.

“There is no silver bullet and that is why we do not think diving into a ban would be a good idea.”

The statement says the watchdog will consider changes to rules where appropriate and consult on any new proposals in the first half of 2019.

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. He says: “First things first it is not our role to please everybody. Our job is to ensure consumers get suitable advice”

    So they do know that’s what they are supposed to have been doing rather than the exact opposite!

  2. Nicholas Pleasure 4th October 2018 at 1:49 pm

    Maybe if the FCA tried to please someone, anyone, on anything that would be a start.

  3. Why don’t they be done with it and just set up their own “in-house” FCA defined benefit transfer facility at Canary Wharf that everyone is compelled to use, since they seem to know whats best for everyone.

  4. I agree with David entirely, the role of the FCA is indeed to ensure that consumers get suitable advice.

    In order to determine whether advice is suitable in respect of this highly nuanced subject, a person would need to be in possession of skill, experience, knowledge and qualifications relevant to the subject

    For example they would certainly have had to have studied and possibly been examined in respect of AF7 or equivalent and to be fully conversant in respect of best practice. In respect of the latter maybe by having read and understood the PFS “A practical guide to Pension Transfers from defined benefit to defined contribution”, as well as Rory Percival’s excellent “An ex-regulator’s guide to Defined benefit transfers suitability and controls”.

    I am sure that David will be pleased to confirm that everyone at FCA involved in this subject (and indeed those at FOS) have all of these attributes and carried out said study?

  5. For those who have not noticed, you must provide a suitability report even if the recommendation is NOT to transfer.

    And if you do then you will be liable if it later turns out that it would have been better to transfer.

  6. Because they don’t know how to give advice, only how to criticise it

  7. I agree, its not their job to please everyone ! I fact its not their job to please anyone !
    They are a regulator, with very clear aims, goals and objectives, I don’t think we need reminding of what these are, but I do believe the FCA does ?
    One thing that is true “absolute power corrupts absolutely” with their persistence to ignore the fact, first and foremost they are a “regulator” yet they insist on being a compliance consultants (with no training or education) they insist on being judge jury and executioner (with no training or education)they insist on being god (with no real right)
    So the word “corrupt” should not be thought of as a criminal act, but more of a virus, a corruption of a system that had and has its faults, it needed TLC to bring it back upto today’s standards and ensuring its appropriate for purpose moving forward.
    Because of these confusions the FCA has with itself, its corrupted an industry that cant function, safely, efficiently, cost effectively and most importantly it cant think for itself.

    So David, is not about pleasing anyone its all about doing your job as a “regulator” and working and concentrating on the the task in hand and meeting your goals, aims and objectives, may I suggest little badges with these on them for all your staff……. it seems the “bring it on” strap line sent the wrong message ?

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