The FCA has reiterated its warnings that advisers outsourcing defined benefit transfer advice to firms with relevant qualifications cannot divorce themselves from responsibility for the eventual recommendation.
While existing FCA rules require additional qualifications to advise on DB transfers, and the FCA has written to all firms who have DB transfer permissions as part of its review of the market, the FCA is conducting checks on the quality of pension transfer advice by specialists both in-house and at third parties.
In a letter to MPs on the work and pension select committee, strategy and competition director Christopher Woolard says: “We have seen Instances where advisory firms that do not hold the relevant qualifications have referred clients to qualified pensions transfer specialists, but the information that is provided by the advisory firm has not been adequate. In these cases we have taken action to protect consumers by visiting firms, reviewing flies and, where appropriate, accepting voluntary restrictions to their permissions”.
As part of a consultation published last month, the FCA is debating whether or not pension transfer specialists should also need to hold qualifications equivalent to those of regular investment advisers in addition to their specialist exams.
The FCA is also consulting on a new requirement to produce a suitability report for cases where the advisers has recommended the client does not transfer.