All the firms responsible for unsuitable defined benefit (DB) pension transfer advice had in-house specialists, a director at the Financial Conduct Authority (FCA) has revealed.
In a letter to the Work and Pensions select committee, Christopher Woolard, the regulator’s executive director of strategy and competition, said all the firms the watchdog has assessed so far as part of its DB transfer advice work had in-house pension transfer specialists who "have either given the advice, or have checked the advice given by another adviser within the firm".
Mr Woolard said: "Our assessment of the firms has included a consideration of the pension transfer specialist's checks and the information that the advice was based on. This includes the accuracy and completeness of the information from the client.
"We have seen instances where advisory firms that do not hold the relevant qualifications have referred clients to qualified pensions transfer specialists, but the information that is provided by the advisory firm has not been adequate.
"In these cases we have taken action to protect consumers by visiting firms, reviewing flies and, where appropriate, accepting voluntary restrictions to their permissions. This action was taken against the specialist firms as they remain responsible for the suitability of the advice. We also decided to provide feedback to the sector via our supervisory updates."
In October, the FCA revealed that advice in more than half of the DB pension 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 FCA stopped several advice firms from giving DB transfer advice when it looked into recommendations made to British Steel Pension Scheme members.
In March the FCA launched a consultation on a new requirement that pension transfer specialists should obtain the same qualification as investment advisers.
In his letter Mr Woolard said: "We believe the time is right to consider the qualifications that pension transfer specialists are required to hold in order to reflect our rules and changes to the pensions market.
"We believe this will increase the standard and quality of advice for consumers."
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.
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 regulator has announced that it will be collecting data from all financial advice firms which hold pension transfer permissions during this year.
In January, the watchdog sent a letter to all firms holding pension transfer permissions revealing the red flags the regulator will be looking for when it enters advisers' offices.
maria.espadinha@ft.com
