FCA to review ‘highly dangerous’ pension transfer info

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The FCA is to scrutinise adviser support firm IFA Compliance after it published what it says is incorrect information about pension transfers.

In a post on its website the firm – which charges firms £350 a month for compliance support – says network members “are banned from transferring safeguarded rights”.

In what it calls a “major blow” to network advisers and appointed representatives, it says FCA rules mean they cannot advise on the transfer of safeguarded benefits, which includes defined benefit funds and policies with guaranteed annuity rates.

The post says: “Safeguarded rights (guaranteed annuities) cannot be transferred by network members or AR firms, because it falls under Regulated Activity Order Article 53 E  and the rules in SUP12.2.2 have not been amended to confirm that.

“This means that network members are banned from transferring safeguarded rights.

“While the rules on this have not changed, what is different today is firstly that guaranteed annuities are taken into account under the new definition of pension transfers.”

It also says consultancy Towers Watson confirmed that it blocked a transfer because FCA guidance meant it could not accept transfer requests from appointed representative firms.

However, Towers Watson told Money Marketing this was not the reason the transfer was blocked.

An FCA spokeswoman says the information is incorrect and that the matter will be referred to its supervision team.

Personal Touch Financial Services sales and marketing director David Carrington says: “It is highly dangerous behaviour.

“Directly authorised advisers rely on that type of information, buying services like this is how they protect themselves from the FCA.

“The comeback on wrong advice would be on the adviser, not on the compliance company.

“It’s at the heart of the DA model. You have more flexibility on how you run your business, but you have to provide all the different bits yourself.

“You choose your support providers carefully to give you what you would otherwise get from a network. For one building block to be wrong or unreliable is a fairly scary place for DAs to be.”

IFA Compliance declined to comment.

At the time of writing the post remains live on its website.