Seven out of 10 advisers say complex FCA rules are making them think twice about giving advice on DB transfers Aegon research shows.
In October 2018 the FCA published its final rules on how it expects advisers to handle DB transfers such as providing a suitability report for a client regardless of outcome.
The study shows 69 per cent of advisers who are or have been active in advising both potential and actual transfers think the complexity of FCA regulations is influencing the likelihood of providing advice.
Respondents also have misgivings about the effect of regulatory interpretations on the DB advice market, with 75 per cent saying it is not currently working as well as it could in meeting the needs of consumers.
More broadly advisers’ feedback is they want to be more confident that the advice they provide is fully in line with the regulator’s expectations and will not leave them open to any retrospective challenges.
Aegon pensions director Seven Cameron says: “Everyone accepts that advice on defined benefits is a highly complex area. Where consensus is harder to reach is exactly how the FCA’s updated regulations and suitability review comments should be interpreted.
“Previous and ongoing reviews of suitability from the FCA shows DB advice remains under intense regulatory scrutiny. FCA strongly worded feedback provides further detail on ongoing weaknesses with some firms’ advice.
“Advisers clearly want as much regulatory certainty as possible and while regulations and updates are helpful, the greater the volume, the more complex it can be to be confident in interpretation.”