Defined Benefit  

FCA writes to DB advisers with new data request

FCA writes to DB advisers with new data request

The Financial Conduct Authority has sent out another data request on defined benefit pension transfer advice, covering the months affected by the coronavirus crisis.

The regulator issued a survey yesterday (November 18) to 1,653 advice firms who hold DB permissions probing them on their transfer business in the period April 2020 to September 2020.

This is the second market wide data request the FCA has sent out this year after it sent one to 1,965 firms in July covering the period October 2018 to March 2020. 

Any firms who failed to respond to the first request will be required to complete the latest request for the full period from October 2018 to September 2020 (24 months).

Firms must submit their responses by December 11.

FTAdviser understands the survey is similar to the previous one in which the FCA asked for data on the number of clients the firm did and did not recommend to transfer as well as their professional indemnity insurance cover and the average transfer value the firm advised on.

The City watchdog said it wants to “continue to understand the shape of the entire DB transfer advice market”.

The FCA encouraged advisers to spread the news about the request to make them aware it was a genuine.

The FCA stated: “We would appreciate if you can make your members aware that the request is genuine. It will be issued from the following email address: pensiontransfers@fca.org.uk”

This was after fraudsters have previously claimed to be from the regulator in order to request information from advisers.

However, a number of advisers took to twitter last night to complain about the number of surveys they have been sent this year.

David Penney, chartered financial planner and director at Penney Ruddy & Winter, said: "Fewer surveys and more action would be most welcome."

Nick Bamford, executive director at Informed Choice, said it was the sixth questionnaire he had received from the FCA this year.

In 2018 the FCA sent firms its first market-wide DB transfer survey looking at the level of advice offered in this area, a move which led to increased supervisory work in the sector.

In June 2019 the regulator published the results of its survey of 3,015 firms between April 2015 and September 2018, concluding that too much of the advice on defined benefit transfers it has seen was "still not of an acceptable standard".

The FCA is concerned that firms are recommending that large numbers of consumers transfer out of their DB schemes, despite its stance that transfers are likely to be unsuitable for most clients. 

Last month (October 28), the regulator revealed it had issued data request to IFAs who advised clients on DB transfers from the Rolls-Royce pension scheme, warning it would take action where necessary.

The FCA, The Pensions Regulator and the Money and Pensions Service have been in talks with Rolls-Royce and its scheme trustees after a surge in the number of transfer requests as a consequence of redundancies at the company.