PFS calls for FCA to stop unregulated firm transfers

Keith Richards, the chief executive of the Personal Finance Society, has written to the FCA and the Treasury asking them to prevent people moving their money to unregulated firms.

He said the move was needed in advance of the new pension freedoms which come into force in April.

Mr Richards said the issue had been raised by a number of PFS members amid concern people may lose their savings once they can access them.

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He said: “We are proposing no transfers should happen from regulated firms to unregulated ones.

“This is following quite a lot of feedback from our members. Whilst it won’t affect them what they are concerned about is the impact it will have on the reputation of the financial services sector in general.

“There is growing concern that without these protections in place everyone gets tarnished and that’s something we have got to avoid given the restructuring we have gone through over the last few years.

“The whole sector has made progress since RDR and it would be sad to see that reversed.”

The looming pension freedoms - which allow people aged 55 or over to access their savings - have raised concerns about the prospect of people spending all their money at once, making bad investments or being mis-sold products.

As part of the reforms people will be given free guidance letting them know what their options are which will also point them in the direction of professional financial advice.

Mr Richards said the PFS’s proposal would not eliminate the risks associated with pension freedoms but would help mitigate them.