View more on these topics

FCA investigates advisers over outsourcing pension transfer advice

FCA interior 620x430

The FCA has referred several advice firms and individuals to its enforcement division for outsourcing pension transfer advice to unauthorised firms.

The regulator warns advisers who outsource activities to unauthorised firms face a “significant risk” to their business model and their professional indemnity insurance may be affected.

The regulator says it has found firms delegating the “entire regulated activity of providing advice to an unregulated third party”.

As a result consumers have been recommended to transfer their personal pensions into high-risk Sipp assets “that may have been unsuitable”.

This activity was operated by firms acting as the regulated entity, however the authorised advisers did not personally contact clients or review the recommendations made.

The number and identity of the firms referred has not not been revealed.

The regulator says: “Firms need to be aware that, while it is attractive to develop new business models, improper delegation of authorised activities may carry significant risks of poor consumer outcomes.

“Delegating regulated advice to an unauthorised party will not mean that the firm can avoid liability or regulatory action for unsuitable advice. If approached in regard to this type of activity, we urge authorised firms to consider the significant implications that entering into this type of arrangement could have on their professional reputation and future livelihood.

“If you are approached and you take on business in this way, it may create a significant risk to your business model and may affect your professional indemnity insurance.”

The FCA says firms should alert it if they are approached by organisations about setting up these kinds of delegation arrangements.


FCA logo new 3 620x430

FCA eyes FOS payout cap hike

The FCA is considering raising the FOS compensation cap for small firms from the current level of £150,000. In a discussion paper published today on how it deals with small businesses, the regulator outlines options to expand its eligibility criteria. It says irrespective of expanding its scope, the maximum payout may need to be raised […]


Ball and chain: FCA under fire as advice confusion blocks guidance offerings

The FCA’s continuing failure to clarify regulatory grey areas is preventing providers from developing guidance solutions for consumers, industry experts warn. The FCA last attempted to explain its views on the boundaries between classes of consumer support in a January paper, which broke down advice offerings into categories of simplified, regulated, limited, focused and generic. But experts […]


‘Elephant’ deals and cutting corners: Why FCA fined Barclays £72m

Staff at Barclays lowered due diligence standards for a group of ultra high-net-worth individuals in a bid to avoid “irritating” the clients, the FCA’s final notice reveals. This morning the regulator revealed it had fined the bank £72m for applying lower standards of scrutiny to a £1.88bn deal involving several “politically exposed persons”. According to […]


FCA fines Barclays £72m over financial crime risk failures

Barclays has been fined £72m by the FCA for failing to minimise the risk the bank could be used to facilitate crime. It is the largest fine ever imposed by the regulator, or its predecessor, for financial crime failings. The failings relate to a £1.88bn transaction the bank arranged for ultra-high network clients in 2011 […]


News and expert analysis straight to your inbox

Sign up


There are 6 comments at the moment, we would love to hear your opinion too.

  1. The FCA needs to investigate outsourcing in general.

    1. How can the adviser form charge for funds under management if they outsource, when they don’t manage?
    2. How ethical is getting a kick back from the DFM – who in effect just has to put up his price to cover?

    I am aware that some advisers claim they take an overview of outsourced funds – is this just a matter of too many cooks?

    The whole thing has a whiff about it that needs sorting.

  2. I must be really stupid, (please no comments)! I thought to be able to provide advice you had to be regulated, anything unauthorised is clearly not regulated advice, (even if it’s outsourced), so how can a transfer proceed?

  3. I thought that it is a criminal offence under FSMA 2000 to provide investment advice if not FCA authorised or exempt?

  4. If there is financial gain in the referral then questions quite rightly need to be asked. Why would anyone refer a client to an unauthorised ‘investment’ firm and risk the client’s savings and their own reputation?

    Enough already (sorry for sounding American there)! Strikes me there is far too much nonsense going on. If the products are that good, go get them regulated and if that takes too long then it’s for a very good reason! I’ve been in this sector for 30 plus years now and the wheels are still the same shape and performing the same core functions as ever they were and with principally the same outcomes!

    If it sounds too good to be true then it probably is!

  5. Compliance Thought 30th November 2015 at 2:35 pm

    Another lot of compensation to be dumped on the FSCS then when the authorised advisers cant meet the claims.

Leave a comment


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 thought leadership.

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