Personal Finance Society chief executive Keith Richards has said the FCA’s data on defined benefit data is not representative and risks spooking the public and insurers.
Last week, the FCA said it would step up its supervision of DB transfer advice as its fresh data showed a significant majority of clients were being told to transfer.
The FCA surveyed 3,015 firms and found that between April 2015 and September 2018, of the 2,426 firms providing DB transfer advice, 1,454 firms had recommended 75 per cent or more of their clients to transfer out of a DB scheme.
When the Money Marketing reported the figures, the Derbyshire Booth Financial managing director Greg Heath commented: “I have serious doubts about these figures.
“I meet many clients and have an informal chat about the process, pros/cons and costs. It becomes apparent that they are unsuitable within the first ten minutes without all the formal advice process being implemented.
“Those clients are not even registered in the figures as a ‘not to transfer’ as it would be a giant waste of money for them to put them through the process.”
The PFS now says the regulator acknowledged that when triage services are taken into account, the percentage figure of 55 per cent was reported.
Richards says: “It is logical that the FCA will hone their focus on risk-based supervision targeting businesses where there is volume activity and therefore the potential for greater risk to consumers if pension transfer advice processes are found wanting.
“This study is therefore not representative of the wider financial advice community, many of whom don’t advise on DB transfers and those who do in the main may have only advised on a small number of cases to meet the needs of existing clients.
“It is important that reporting of failings is proportionate and does not misrepresent the majority or erode public trust more broadly.
“It is equally important that the profession and professional indemnity insurers do not over-react to this latest FCA data and automatically think there is a widespread problem with the defined benefit transfer advice being given by the entire financial advice profession.”
Richards then went on to say that professionalism was evidenced both by the past FCA reviews, as well as with the fact that hundreds of the trade body’s members signed up for the Pensions Transfer Gold Standard.
Richards said that the government introduced pension freedoms to allow people to do what they what, when they want, no caps, no restrictions.
He comments: “Chancellor George Osborne made it clear that ‘no one ever has to buy an annuity again’. What we need to see is the government, regulators and the profession working together in the wider public best interests.”