James Coney 

IA’s tinker-proof fund could be problematic

James Coney

James Coney

Contingent charging is back on the FCA’s radar

What is better: a few people not being able to afford pension transfer advice, or lots of people getting bad outcomes from pension transfers?

That is the quandary that now confronts us as the FCA again limbers up to tackle the rather uncomfortable figures that have come out of its review of defined benefit pensions.

Over a three-year period, only 72,904 out of 234,951 scheme members who had received advice on a transfer stayed put. I say only, because the regulator’s own principle is that advisers should start from the basis that savers should not transfer.

Of course, the statistics are skewed. The survey was taken at a time of high transfer values, and in a market where fears were running high about the health of DB schemes.

In addition, those needing advice are more likely to be insistent on making a transfer than those who do not come forward – which may sound obvious enough. But the fact of the matter is that the FCA has promised further work on this area, and that means contingent charging – that great, hard to justify, commission – is on its radar again.

Do not say I did not warn you all about the direction of travel for contingent charging.

Who is policing the perimeter?

A press release arrives in which I learn that the watchdog has a perimeter. Almost 20 years as a financial journalist and the regulator dumps an entirely new phrase on you.

Anyway, it turns out to be quite important, because it is all about what it does and does not regulate. But that is not really the problem – although, of course, the FCA has managed to make a mockery of its attempts to regulate bits of the market.

No, the real problem is that rogue companies wilfully pretend they are regulated when they are not.

It is this area where the FCA seems completely unable to act. So in effect, there is no point having a perimeter, or whatever you want to call it, because no oneis policing it. Maybe Andrew Bailey needs to speak to Donald Trump about his wall.

James Coney is money editor of The Sunday Times