FCA to question 3,000 firms on DB transfer risks

Business woman with question mark on a blackboardThe FCA has confirmed that the fourth phase of its multi-firm supervision exercise on pension transfers will involve a market-wide data request to all firms with defined benefit transfer permissions.

In a Freedom of Information request, the watchdog says it expects 3,026 firms will be completing its questionnaire.

The probe is the fourth phase of the supervision exercise launched three years ago to assess how firms undertaking DB transfers are responding to pension reforms.

The FCA is also using the exercise to ascertain any further potential customer risks associated with DB transfers.

The FOI shows that six firms were contacted by the FCA in the first phase of the exercise. Sixteen were questioned for the second phase and a total 46 for the third phase.

Tom Selby: New DB transfer rules under the microscope

Eight firms voluntarily varied or removed their DB permissions across phases two and three, the regulator confirms.

Money Marketing reported that the FCA sent out questions to advisers on 12 November as part of this exercise.

It was not confirmed in the FOI how the final questionnaire to the 3,026 firms that currently hold DB transfer permissions will be distributed.

The FCA says: “A pilot will be issues to a small amount of sample firms initially. The questionnaire will then be sent out to the remaining firms as a market-wide request.”

The questionnaire will be both issued and returned in Q4 this year.

Advisers who gathered at The Pension Debate III last month continued to express their concerns over potential liabilities and a squeezed market for professional indemnity insurance.

A fresh track for DB transfers?

Topics such as triage, the process of vetting unsuitable DB transfer clients early in the process, and level of guidance from the FCA continue to be topics of discussion in the pensions space.

The regulator’s final stage of the supervisory exercise begins close to one year after the fallout from DB transfers relating to the British Steel Pension Scheme collapse.

Figures recently released by the watchdog show the number of people moving from DB to defined contribution pension schemes has risen by 587 per cent since in two years.

This compares figures for the six months to March 2016 with those from the six months to March this year, when just below 35,000 DB transfers took place.



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  1. I anticipate a fair bit of carnage in the wake of this latest Pensions Review. Thank goodness it won’t affect me (directly).

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