Pension transfer specialists will have to get the same qualifications as an investment adviser in addition to the existing specialist qualification, the FCA has ruled today.
While it has stopped short of a contingent charging ban, it is raising the qualification level for pension transfer specialists.
All pension transfer specialists will be required to hold a specific qualification for providing advice on investments by October 2020 so they can “identify whether a proposed pension scheme and investment solution is consistent with the client’s needs and objectives.”
Advisers will need to understand their client’s general attitude to the risks that go with a transfer, and not just how they feel about investment risks though, the FCA stressed.
Advisers will also have to provide a suitability report even if the recommendation is not to transfer, the FCA has confirmed.
The regulator will not impose a contingent charging ban at this stage, it has said.
While those responding to its consultation expressed fears about the impact on access to advice if contingent charging was banned, the regulator added that “responses to the FCA’s consultation confirm its initial analysis that the evidence it has seen does not show that contingent charging is the main driver of poor outcomes for customers.”
FCA executive director of strategy and competition Christopher Woolard says: “We expect our interventions to improve the quality of advice which will help to reduce the number of complaints against advisory firms.”