Defined Benefit  

FCA visits four more pension firms since October

FCA visits four more pension firms since October

The Financial Conduct Authority (FCA) has visited four more firms about advice on defined benefit transfers since October, bringing the total count to 16.

The regulator said in a letter to chairman of the Work and Pensions committee, Frank Field, advice on DB  transfers remained one of its main priorities.

It said it had “identified firms who are particularly active in this area” and had requested details of their business models. 

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So far it has visited 16 firms to review their client files. In its latest update in October the regulator said it had visited 12 firms, four of which ceased providing the advice.

Christopher Woolard, executive director of strategy and competition at the FCA, wrote in the letter: “Advice on defined benefit to defined contribution transfers remains a priority for the FCA; as it has done for the last few years.

“Where we found failings in the advice provided we have taken action, including asking firms to stop providing further advice until they make changes to their business models.” 

Mr Woolard’s letter came in response to Mr Field’s enquiry about advice activity around the failed British Steel pension scheme, which, he said, had seen 1,700 members transfer their DB pensions.

The scheme gave members until 22 December to decide whether to move their defined benefit (DB) pension pots to a new plan being created, BSPS II, or stay in the current fund, which will be moved to the Pension Protection Fund (PPF).

The scheme has about 130,000 members of which 43,000 are deferred, meaning they have not yet reached retirement.

Members have since been targeted by unregulated introducers and advisers willing to advise on the transfers.

The FCA intervened by holding seminars and sending letters to firms reminding them of their obligations.

It will also engage with firms known to have advised British Steel members and review their client files for suitability.

It has asked a number of firms to restrict their regulatory permissions to provide pension advice, most recently Active Wealth.

The adviser was found to be working with unregulated introducer Celtic Wealth, which targeted steelworkers with very low fees for pension transfers.

“Where we find firms have provided unsuitable advice we will consider the most appropriate intervention which may include requiring firms to provide redress to clients where they have suffered financial loss,” Mr Woolard told Mr Field.

The regulator said it was not aware of any other instances where advisers were targeting members of a particular scheme.