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FCA ‘wholly rejects’ MP criticisms over British Steel transfers

Andrew Bailey BBA Conference 2012 480The FCA has said it “wholly” rejects the conclusion reached by the work and pensions select committee of MPs on its conduct during the British Steel Pension Scheme saga.

At the end of last week select committee chairman Frank Field said the FCA risked “sleepwalking into mis-selling scandal” on BSPS in a series of documents criticising the regulator’s handling of transfer activity.

But FCA chief executive Andrew Bailey has rebutted Field in a letter published today which explains in detail the action the regulator has and will take in the future.

Bailey says the FCA has held four meetings in Swansea and Doncaster with pension transfer advisers to remind them of their duties amid BSPS concerns.

He points out 151 advisers attended these sessions and an additional 148 financial advisers were written to.

Bailey also reiterated a point made in a letter from the FCA’s supervision director Megan Butler to Field published last week which said “a blanket ban or suspension” of transfers would not be warranted as many are suitable.

He says while the advice to transfer out of a DB scheme is generally unlikely to be in the best interest of a member, at times it could be.

The FCA says it has received correspondence from steelworkers which indicates the decision to transfer out is appropriate for them.

Bailey also challenges the manner in which the select committee published evidence on 12 January.

He says: “I was disappointed to see that this was provided to the media around 30 minutes prior to us [FCA] receiving it, meaning we were receiving queries regarding it before knowing the context.

“While we appreciate the timing of statements or publications are a matter for the committee, we note that with other select committees there is usually a courtesy in notifying us, at least at the same time as the media, that a publication has been issued.”

Reacting to the letter Aegon pensions director Steven Cameron says: “The FCA has firmly and comprehensively rejected the work and pension select committee’s claim that on defined benefit transfers, it is ‘sleepwalking into another huge mis-selling scandal’.

“Many individuals are desperately seeking advice on whether to transfer from defined benefit schemes, often to access the pension freedoms available within the defined contribution alternative and it’s important not to sensationalise this highly complex and emotive topic.

“The FCA has recognised their current guidelines on such transfers are in need of an overhaul to allow for today’s retirement choices, and we expect their new guidelines by March which should give advisers the clarity they need to advise with confidence, and begin to meet pent up consumer demand.

“The priority needs to be making sure anyone who is currently receiving advice, or receives it in future, can be confident in it. It’s also important to identify any failings in past advice, but it’s wrong to suggest anyone, be it the FCA or the financial community is sleepwalking into any form of mis-selling scandal.”

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Comments

There are 14 comments at the moment, we would love to hear your opinion too.

  1. John Hutton-Attenborough 18th January 2018 at 2:18 pm

    Good to know we have nothing to worry about then and FCA has everything in hand.

  2. Frank Field said the FCA risked “sleepwalking into mis-selling scandal” on BSPS in a series of documents criticising the regulator’s handling of transfer activity.
    The FCA has said it “wholly” rejects the conclusion reached by the work and pensions select committee of MPs on its conduct during the British Steel Pension Scheme saga.
    What have i being saying for years Treasury Select all wind cannot do anything regarding the FCA who are a law unto themselves. It would need the goverment to give powers to the treasury select and they wont because they may have to pay for doing so.Scrap it,it is a waste of space and i am fed up of hearing tyrie and field and hodge talking drivial

  3. Bethell Codrington 18th January 2018 at 2:39 pm

    No surprises there then. Why are FCA after the event, investigating all these companies with transfer permissions, in fact banning some of them. They thought them all suitable to have licenses, but ooopps “sorry, perhaps we should not have been so liberal with the permissions”. Don’t worry, we know what we are doing….

  4. What was it that prevented the FCA from acting nearly 3 years ago and saying to MPs that we are not prepared and that enormous consumer detriment is certain until such time as adequate consumer protection is put in place? Is the FCA truly independent? Did they appreciate the problem? (We did) Were they afraid of Government? If so what was the reaction of the Government? This is farcical – pass the buck and the reality is that MPS certainly, Treasury (certainly) and possibly FCA let an awful lot of people down.

  5. It is refreshing Andrew Bailey was prepared to defend the FCA against the DWP committee, and to some degree the adviser who have given advice suitable to the Steel workers.Based on the evidence they have seen

    The letter confirms that out of the 129 cases reviewed so far 65 cases are deemed suitable advice. No doubt, the FCA will ask the advisory firms to review the advice with the client so that fully understands the decision he has taken. If after the review is carried out the client is still happy to transfer, we may see a more positive outcome.

    What is also most important point of the correspondence being that Andrew Bailey stated the policy of the FCA is (and has not changed) that in general it is not in the individuals best interest to transfer from DB to DC

    . He does acknowledge that the advice must be suitable for the individual consumer after he has been advised correctly and has decided the are taking everything into account the decision to transfer is in the client’s best interest.

    This is the point that has frustrated me about Mr. Fields and the committee’s attitude is that they know best and forget the consumers wishes the nanny state knows best

    Mr. Bailey has certainly made his position clear and this correspondence could be a pivotal moment in the DB/DC controversy

    The ball is now in Mr. Field and his committee’s lap They will now have to re consider their position and attitude to DB transfers If they do not like it they can always ask their colleagues in the house to abolish pension freedom.

    One wonders how many of those would vote and support Frank on that one

    Maybe Mr Fields should consider his position and consider stepping down from this committee

  6. How lovely it must be just to be able, when faced with a message you don’t like, to simply say ‘I wholly reject that’

    Perhaps that would work when my (up again, no doubt) FSCS levy is announced. ‘
    Thanks for the invoice chaps, but I wholly reject it’

    Of course that won’t work because it’s one rule for the regulated and another for the regulators.

    When it is on the giving end of yet another dismal failure, will any single individual be held to account? Will anyone lose their livelihoods?
    No. Again, those who sit in the privileged position of regulator can fail with seeming impunity.

  7. I was not aware that Frank Field was a qualified adviser.

  8. Hilarious !!

    So Mr Bailey favors the British Archers salute, to his TSC counterparts !

  9. Well, he would say that wouldn’t he? The alternative is capitulation and humiliation.

    And, if an unsuitable/unclear verdict on 50% of all the cases the FCA has examined thus far (assuming this small sample is representative of all of them) isn’t indicative of a mis-selling scandal, how big will the percentage have to get before Mr Bailey IS prepared to admit to a mis-selling problem?

  10. New guidelines from the FCA which should give advisers the clarity they need to advise with confidence? Those will be something to see.

    Given the unbelievably voluminous SR’s required to document (compliantly) just a £20K ISA investment, one wonders how many hundreds of pages the FCA’s guidance on DBP transfers are likely to run to?

  11. Is it not something of a perverse and cynical irony for Bailey to talk about publishing guidelines designed to help advisers do their jobs better when the FCA itself has and continues to take no notice whatsoever of the government’s guidelines on how to be a better regulator?

  12. fca had some of these guys on radar in 2016 not fit for purpose

  13. bailey should give his bonus back and why does he get one funded by us anyway????

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