The FSA reviewed the quality of advice given to consumers to switch into a personal pension or Sipp. It looked at 500 cases from a sample of 30 adviser firms and found evidence of unsuitable advice being given in a “significant proportion of cases”. It states that firms must review all past and future pension switching advice and take remedial action where necessary.
The Consulting Consortium says its pension business transfer review will help give a fair indication as to where firms would rank in the FSA’s survey therefore highlighting any potential deficiencies. It says its review will assist firms in ensuring they possess a thorough understanding of the effectiveness of their current procedures.
Managing director Joanne Smith says: “This review has highlighted just how vital it is that firms are fully aware of exactly where they stand when assessed against the FSA’s standards of advice. It is obvious that the FSA has taken a dim view on these findings and the likelihood is that it will look increasingly closely at this sector of the market. This free offering provided by TCC provides firms with the perfect opportunity to assess their current position before the FSA considers closely assessing firm’s compliance in this area.
“A number of firms will be subject to enforcement investigation as a result of significant failings identified during the review. All firms with deficiencies found during the survey will be expected to review their other transfer cases and pro-actively take remedial action to ensure that clients are not disadvantaged. There have certainly been some shortcomings on pension transfers and we are urging firms to implement plans to ensure measures are put in place to combat these.”