View more on these topics

FCA includes 92 firms in DB transfer advice review

The regulator has followed up with 10 visits, Money Marketing understands

Network UK map

A total of 92 firms were included in the FCA’s review of defined benefit transfer advice, the regulator has confirmed.

Money Marketing understands that only 10 of these were visited by the FCA, however.

Money Marketing has seen a file request regarding DB transfer advice dating back to early 2016 where a firm had been identified as having conducted an increased volume of transfers in the wake of the freedoms.

The review is being described as a multi-firm supervision exercise, and it is understood that the regulator will produce some kind of formal response to the review.

However, it is unclear whether this will take the form of further guidance, rule changes or additional enforcement action.

At present, Money Marketing is aware of three firms that have been visited by the FCA (Tideway, CFPML and HDIFA), two that have signed voluntary agreements to cease business (Intelligent Pensions and Financial Solutions Midhurst), one that was ordered to cease business (Strategic Wealth UK), and two that have temporarily suspended some services (Selectapension and O&M Pension Solutions).

O&M’s regulated DB pension advice service, Transfer Adviser, remains open to current and new customers, but its non regulated transfer value analysis only service, Transfer Bureau, is suspended to new registrations due to the number of requests it was receiving from existing customers.

The review has resulted in guidance notes and a consultation paper on DB transfer advice from the FCA this year.

The consultation last month proposed new rules to ensure advisers were giving personalised recommendations to transfer and updating the requirements for transfer value analysis. While the FCA says it is still of the belief that most pension transfers will not be in a client’s best interests, it has recommended in the paper that advisers should not have to assume this is the case.



Richard Parkin: DB transfers aren’t black or white

I think we were all pleased to finally see the FCA’s consultation on defined benefit transfers. Even for those that don’t agree with all of the content, the time for revision of the current rules is long past. Even before pension freedom, the rules, many of which were formulated in the aftermath of the mis-selling […]


DB transfer boom could increase PI bills, advisers warn

Advisers have expressed concerns that the cost of their professional indemnity insurance will rise because of the defined benefit pension transfer boom. In a survey of more than 200 advisers by Prudential, nearly 40 per cent said that were concerned about contested advice becoming a future liability, and 17 per cent expected PI bills to […]

PFS chief: Stricter DB transfer advice rules are good news

The FCA’s recent proposals to introduce stricter rules on advice requirements for pension transfers are a welcome step in the right direction. Over the past few months I’ve aired my concerns about the spike in pension transfer activity since pension freedoms, with figures from The Pensions Regulator suggesting 80,000 defined benefit pension transfers took place […]


SJP under fire again over charges and exit fees

Clients of St James’s Place have attacked the firm over what they say is an opaque charging structure and punitive levels of exit fees. The Sunday Times was asked to examine what retired solicitor Arnold Rosen had been charged by SJP between 2009 and 2015 after Rosen could not work out the level of charges […]


News and expert analysis straight to your inbox

Sign up


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

  1. Alasdair Sampson 18th July 2017 at 12:12 pm

    The review cohort of 92 firms, whilst no doubt resulting in enormous amounts of data for FCA to handle, is still relatively small compared to the overall number of firms who are authorised to and who will be actively engaged in DB transfers – to say nothing of those IFAs who are not so authorised but who may still be active in this area either directly and unlawfully or almost lawfully by referral to those firms who are so authorised.

    How many other IFAs are out there engaged in what can be very high risk business but executing the work in such a manner that is almost guaranteed to generate complaints to FOS – or ultimately claims to the FSCS?

    I am currently handling two FOS complaints against an IFA firm to whom my clients were referred by a then unauthorised “adviser” for advice to transfer from DB schemes to SIPPs which then invested in Contracts for Difference trading – an investment that can hardly be said to be low risk and easy for your average Joe Public retail client to understand.

    Both cases involve losses well in excess of £150,000.

    In the first case, the TVAS was wrong as the date of birth was wrong by 10 years having been knocked off the client’s age, resulting in artificially low CYs. But the firm still gave advice.

    They later obtained an updated TVAS but the corrected CYs were not only still wrong because they did not use the correct retirement age, but also they exceeded the firm’s stated max transfer threshold CY by a factor of 2. I estimated that the correct CY on her DoB and actual retirement age would be about 20%+. They still advised the transfer.

    I lodged initial complaints not only with the transfer advice IFA firm but also against the CfD trading provider. Both were rejected.

    Immediately after I lodged the complaint with the IFA their CF30 adviser/director was suspended.

    The IFA firm’s final decision was, tiresomely as expected, that as they had only advised on the pension transfer to the SIPP and not on the investment of the SIPP into CfDs on which some other adviser gave advice, they were not responsible for the resultant total investment loss of the SIPP funds.

    Oh dear. Clearly that hadn’t heard of FCA’s position in TailorMade, or the FOS decision in S v Foreman. And clearly large sections of COBS were a total mystery to them.

    I then lodged the complaints with FOS against both the transfer advice IFA and also against the CfD trading provider. Both have been upheld by the adjudicators. Both are to be reviewed by the ombudsman.

    I have just received from FOS a copy of the IFA firm’s response to be considered by the Ombudsman – this is essentially the same as their final decision to me but with some added bells and whistles.

    The bells are that whilst I was aware that there were a number of other similar cases, the IFA firm admits that it is now investigating a total of 38 similar/identical cases.

    The whistles are that the IFA’s CF10 compliance director has now self-reported the firm to the FCA, has made regulatory complaints to FCA against its own former CF30/director and against the unauthorised introducer “adviser”, and has itself made a number of complaints for others of the 38 SIPP transferee clients against other parties (a favourite way to deflect the spotlight of responsibility). It also disclosed that it has 10 other complaints to FOS against it arising out of the same type of circumstances.

    My best guess is that FCA will conduct an investigation, not a supervision review, that the IFA firm and its CF10 compliance director will be whacked with fines, and that the firm will be required by FCA to advise all 28 of the rest of the clients who have not yet raised complaints to FOS that they should consider doing so.

    If that were to occur then that level of complaints, even assuming that not all have similar levels of loss to my two cases, would be such that I would have to wonder how long this IFA firm will still be standing.

    All these would then fall as claims to FSCS.

    I will bet my bottom dollar that this type of scenario is far from unique.

    • And then it will probably Phoenix…

      Not sure what the point of a regulator is, when people can simply dodge the bullets and rise again like some kind of vampire figure

  2. i 18th July 2017 at 4:55 pm

    It seems bizarre the Trustees of the DB Schemes allowed these “transfers” to happen at the oldproduct provider and the new product provider. Where is their Stutory Duty of care ? Similarly the product providers allowing the falsifying endowment to deceive customers of banks and insurance companies – and their continuing to make the same targetted new business at high costs – and the Pension Regulator wants to engage IFA’s to help them with the identification scams of pensions when their owner the Government decided to restrict advisers to less than 20,000 ? The fault lies at the PRoduct providers lobbying government ( who are basically imbeciles and incompetents) to change legislation in the insurance company’s favour. Who are the real crooks and scam merchants in pensions ? A governemtn who permitted SERPS ? A government who permitted “flexible Drawdown ?” or the huge tax raised form people taking thei pension funds ? In my opinion it is the Government who have created CHAOS Catastrophe in Pensions and the State pension is effectively BUST !

Leave a comment