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FCA to publish consultation on DB transfer rules

The FCA is to consult on its rules around advising on defined benefit transfers.

Having released several guidance notes on DB transfers since the pension freedoms, the regulator has decided to issue a paper covering potential rule changes to advice on safeguarded benefits, including DB to defined contribution transfers, in the coming months.

In the wake of the Financial Advice Market Review, the FCA issued guidance on offering streamlined advice in a note earlier this month.

The regulator said that while its example case had considered a DC to DC transfer, it would release a further paper covering DB transfer advice “in due course”.

The note reads: “Firms may be considering versions which involve transferring safeguarded benefits such as DB to DC transfers in which case there are additional considerations to take into account. We are expecting to publish a consultation paper on advising on safeguarded benefits in due course.”

No definitive timetable has been set for the paper, according to an FCA spokeswoman.

The FCA was unable to comment on any potential areas the consultation will cover.

The regulator has opted for a consultation paper, a document that considers changes to its rules, as opposed to a thematic review, where it has identified risks in a particular area and investigates firms and practices.

Aegon pensions director Steven Cameron says: “With the huge spike in demand for DB to DC transfer advice, we believe the FCA should be revisiting what constitutes suitable advice here as a priority. In particular, advisers would benefit from regulatory certainty on how to reflect the benefits of pension freedoms available to those in DC schemes.”

The FCA began taking market views on how advice could ensure members receive good outcomes when considering a pension transfer in April last year.

The FCA said at the time: “We expect to undertake more work on pension transfers and will be considering the responses and suggestions in more detail as we look at possible policy options going forward.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Was that another horse I saw running out of the stable?

  2. Changing the rules around what constitutes suitable advice for DB transfers is fine – so long as the rules are not retrospectively applied to the rules that were applicable (& set out by the FCA) and adhered to by an advice firm at the time of advice. This industry has a nasty habit of using retrospective rules for finding advice suitable at the time – now to be ‘non-suitable’…….something that both the FCS and FOS need to firmly get to grip with.

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