Although the pension issue is largely down to HMRC rules, the Financial Conduct Authority could consider it from other angles – namely, its wider remit to promote competition and barriers to transfer as discussed in the platform market study.
Competition is not working well if people looking to transfer pension providers cannot do so.
The FCA is investigating the circumstances leading up to the Woodford fund suspension but they could also consider the block on people changing between share classes.
As we learned in the Investment Platforms Market Study, the FCA wants to make it easier and cheaper for investors and advisers to switch between platforms and providers.
Bringing back cash rebates would be the simple solution to the in-specie transfer issues highlighted in that study and with hindsight could have prevented Woodford fund holders being trapped with their current providers.
Charlene Young is senior technical consultant at AJ Bell