The Financial Conduct Authority (FCA) are looking at Defined Benefit (DB) Pension Transfers to assess the advice consumers are receiving from firms and whether they are at risk of harm.
The number of consumers transferring from DB schemes to personal pensions has significantly grown over the past year.
The FCA are looking at how advisory firms have adapted their business models and processes in response to these changes in the market. They have also focussed on the risk of harm to consumers leaving their DB schemes.
The regulator has found that some firms are not giving enough attention to customer outcomes when changing their business models, in the wake of the pension reforms. These initial findings support observations in the Sector Views 2017.
Over the last 2 years the FCA has requested detailed information from 22 firms on their DB transfer business. Following analysis of this information they reviewed a sample of client files for 13 firms, and visited 12 firms. As a result, 4 firms have chosen to stop advising on DB transfers.
The FCA has also continued their work on scams, particularly those that target consumers’ pensions. Since the start of 2016, 32 firms have chosen to stop providing advice or have decided to limit their pension transfer activity.