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.
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.”