The FCA should review whether it is doing enough to protect consumers from pension scams, lawmakers say.
In a report published today, the work and pensions select committee makes a series of recommendations to the government.
These recommendations cover both the institutional and retail sectors with the committee saying it is “unconvinced” self-regulation works.
The report says the committee was concerned to hear the FCA’s dedicated scams team only consisted of approximately 10 people, out of 3,700 staff.
It suggests the watchdog should review whether it dedicates sufficient resource to combat active pension scams, prevent new pension scams and protect individuals.
The committee previously criticised the FCA’s “inscrutable” register of financial advisers for compounding the problem of phoenix firms.
It pointed out these firms voluntarily go out of business to avoid compensation claims against them and then simply reappear under a new name.
To counter this MPs recommend the FCA’s list of unauthorised firms be expanded into a widely publicised database.
The database should be regularly updated by the range of governmental organisations involved in pension scams and act as a co-ordinated early warning system.
Other recommendations include mandatory improvement to pension investment costs disclosure, a charge cap of 0.75 per cent on retirement pathways and increased take-up of Pension Wise.
Select committee chairman and MP Frank Field says: “Ripping off pension savers could be eliminated. The select committee is calling on the government to shine the searchlights into that part of the financial industry that has settled down to misinforming, mischarging, overcharging and making a fat living off the hard-earned savings of pensioners.
“Government and regulators should not wait for the industry to fail to act voluntarily as they have so many times in the past. It must put the full force of the law behind such changes.”