Speaking at the PIMS conference on board the Arcadia last week, Grant Thornton senior manager Scott Soper said that pension transfers are top of the FSA’s agenda.
He said: “At the moment, the focus is on personal pension to personal pension transfers, where the FSA is saying, we cannot prove they are unsuitable but equally we cannot prove they are suitable, and they are taking the line that neutrality is not good enough. They must be positively suitable rather than just not unsuitable, which is worrying.”
Last month, the FSA told Money Marketing that four firms had been referred to the enforcement division over pension switching advice, with 15 others offering or being forced to undertake past business reviews. AWD was fined £1.2m in November last year and told to compensate clients.
Speaking more generally, Soper said “a small minority” of advisers are undermining the FSA’s ability to protect IFA interests in Europe.
He said: “It is a bad time for all this to be coming out because now is the time we need the FSA to be empowered and taken seriously at a European level to fight for our industry.”
Soper also warned against the FSA’s recent habit of “stealth regulation”, for example in the application of its best execution rules to IFAs arranging business from November last year.
“This means you are treated now as a stockbroker. If you have a transaction to do you have to execute it with the retail client by the most efficient lowest cost route you can. That was hidden in a quarterly consultation and policy statement last summer and snuck into the rulebook.”