The FCA has been urged not to place an outright ban on contingent charging by some of its internal advisers.
Money Marketing understands members of both the FCA’s smaller business practitioner panel and wider practitioner panel – two industry groups set up to advise the regulator – have put pressure on the FCA not to completely ban the practice of contingent charging as it reviews the idea as part of its work on defined benefit pension transfers.
One panel member says the FCA “appears to have listened” to the two advisory bodies and they now rate the chances of a ban as “unlikely”.
“It’s positive we’ve had some real input into that,” the member says.
The panels were understood to be concerned about the unintended consequences of tightening contingent charging rules on the potential to access advice.
Last month, the FCA confirmed a number of rule changes for pension transfer advice, including ensuring that all transfer recommendations are personalised.
However, it also put out a number of further ideas to consultation, including if it should intervene around how advisers charge for DB transfers, given the potential for conflicts of interest if they get paid more in the event of a positive recommendation to transfer than a negative one to stay put.
The FCA said at the time that it recognises “an inherent conflict of interest when advisers use a contingent charging model”.