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FCA targets nine providers with DB transfer review letter

The FCA has confirmed to Money Marketing it has written to the heads of nine major product providers reminding  them to review their defined benefit transfer procedures.

In a Dear CEO Letter sent on 22 March, the FCA lays out how providers should treat customers fairly in the context of DB to defined contribution transfers.

It went on to say what product providers need to consider when designing, marketing and providing pension products.

When asked to give further detail about the firms the FCA says it cannot give more information as to how the criteria was set for writing to the companies.

Money Marketing has been told by three providers they have received the letter including Aegon, Aviva and Scottish Widows.

It also understands the watchdog has been targeted in who it has written to and focused on life companies rather than platforms with pension products or Sipp providers.

Meanwhile AJ Bell, JLT Group, Curtis Banks and Nucleus have not received the letter.

So far two Sipp providers, Intelligent Money and DP Pensions have pulled out of the DB market due to concerns about being held responsible for the suitability of advice.

Intelligent Money chief executive Julian Penniston-Hill has confirmed it has not received the letter.

The letter from the FCA has inspired a number of conflicting interpretations with the regulator later clarifying providers are not responsible for advice.

The watchdog has also clarified to Money Marketing the letter is applicable to providers who have not received it and adds: “What we expect from providers and how they should identify the drivers [when assessing whether a transfer is harmful to consumers] is set out in the letter under what they need to consider when designing, marketing and providing pension products.”

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