View more on these topics

FCA clarifies providers not responsible for suitability on DB transfers

The watchdog has confirmed pension providers are not responsible for the suitability of advice on defined benefit transfers Money Marketing can confirm.

A letter the watchdog sent to product providers last week about their DB transfer procedures inspired a number of conflicting interpretations.

In a Dear CEO letter sent to the heads of major providers, the FCA lays out how providers should treat customers fairly in the context of DB to defined contribution transfers.

It explained the watchdog has now completed its review of pension product providers and identified the key drivers of harm in the market.

The letter went on to say what product providers need to consider when designing, marketing and providing pension products.

In response to the letter Sipp provider Intelligent Money announced it was pulling out of the market and it would no longer accept DB transfers.

A number of other product providers said they are not pulling out of the market but have raised concerns about the implications of the letter and want further clarity from the FCA about it.

Now an FCA spokesperson says: “We do not expect pension providers to be responsible for the suitability of advice provided to consumers by advisers, but we do expect them to understand the underlying drivers to form an assessment on whether harms are being caused to their consumers. This is in line with our existing rules and published guidance.”

On background the regulator also points to its 2013 guidance to Sipp operators FG13/8 and adds: “The Dear Ceo letter reflects what we have learned from our review of pension product providers and is an area of high priority for the FCA because of the potential harm to consumers.

“We wanted to share our feedback with the sector as soon as possible and continue to engage with product providers where relevant.”

Recommended

6

FCA letter on DB transfers causes confusion among providers

A letter the watchdog sent to product providers last week about their defined benefit transfer procedures has inspired a number of conflicting interpretations, Money Marketing can reveal. In a Dear CEO Letter sent to the heads of major providers, the FCA lays out how providers should treat customers fairly in the context of DB to defined contribution […]

1

FCA tells providers to review DB transfer procedures

The FCA says product providers must be able to show they have taken the needs of customers into account that have transferred out of defined benefit schemes. In a Dear CEO Letter sent to the heads of major providers, the regulator lays out how providers should treat customers fairly in the context of DB to […]

12

FSCS fields 600 claims against DB transfer adviser

The Financial Services Compensation Scheme has received at least 625 claims against a collapsed advice firm involved in defined benefit transfers into high-risk Sipp investments, Money Marketing can reveal. Data provided by the lifeboat fund shows that the FSCS has so far made 530 decisions on claims relating to Merseyside firm Henderson Carter Associates, of […]

Life is a fragile thing

By Natalie Dewar, Marketing Coordinator, Royal London We can try to live each day to the full in the belief nothing can stop us… but then something happens that catches you completely off-guard. The week before I started at Royal London didn’t quite go to plan – instead of preparing and calming my nerves, I was […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Given the highly debatable distinction between assessing suitability (of a recommendation to transfer out of a DBP scheme) and understanding “the underlying drivers to form an assessment on whether harms are being caused to their consumers”, might it not be hugely clearer for all concerned for the FCA simply to ban SIPP providers from facilitating investments into high risk, off-piste investments, at least for anyone other than demonstrably HNW, sophisticated and experienced investors?

    Looking at James Hay’s list of permitted investments via their SIPP, one really has to wonder for just how many people stuff such as Gold Bullion, PIBs, Genuinely Diverse Commercial Vehicles, Contracts for Difference and TEPs are likely to be remotely suitable.

    Still, clarity and simplicity have never been the FCA’s fortés, have they?

  2. “You should ensure your processes for review, governance and quality assurance (QA) for the messages you provide to adviser firms are accurate and unbiased. Your messaging should be balanced, clear and accurate.”

    This is good advice for everyone, including regulators…

  3. We should draw comparisons to dear CEO letters to SIPP providers and wealth managers in the past – and their consequences.

    This really does feel like a Regulator on the back foot rather than good Regulatory intervention – an over reaction, like the hike to ombudsman limits

    If this missive had been issued as soon as pension freedoms were announced, there would be no pension crisis

    The horse has bolted – AGAIN

    What a shame

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com