The Financial Conduct Authority (FCA) will be collecting data from all financial advice firms which hold pension transfer permissions during this year, the regulator's head of supervision has revealed.
In a letter to Frank Field, chair of the Work and Pensions select committee, regarding its inquiry into British Steel Pension Scheme, Megan Butler said that the intention is to assess “practices across the entire market to build a national picture”.
In October, the FCA revealed that advice in more than half of the defined benefit pension (DB) transfers where the recommendation was to move the retirement pot was unsuitable or unclear.
From a total of 88 DB transfers analysed by the watchdog since October 2015, only 47 per cent were suitable. The regulator found that 17 per cent were unsuitable and in the remaining 36 per cent suitability was unclear.
Ms Butler also revealed that the regulator has asked 45 additional firms, which it knows “are active in DB transfers,” for information.
Steelworkers had until 22 December to decide whether to move their 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, which means transferring out of their pension is an option for them.
FTAdviser reported in November that several steelworkers appeared to be transferring out their pensions after being lured by cheap deals by unregulated introducer firm Celtic Wealth Management & Financial Planning, which then referred the clients to advice firm Active Wealth.
The Work and Pensions select committee, which held hearings with steelworkers, financial advisers and regulators amid concerns about the financial advice being given to the members, will publish a specific report on this case early this year.