With the FCA urging clients to check their advice, the regulator by implication — whether intended or not — is suggesting to all DB transfer clients that there is something to check, that something might not be right.
That fosters further distrust in the industry and it won’t be long before complaints start pouring in, whether or not they are with merit, professional indemnity insurance premiums rise again, and once more the regulatory levies rise to accommodate this increase in queries regarding DB pension advice.
Nobody needs a crystal ball to see this train coming round the corner. In fact, as FTAdviser reported last week, the regulator is writing directly to around 7,700 former members of the British Steel Pension Scheme to invite them to revisit the advice they received and complain if they had concerns.
Only 21 per cent of the 192 instances of advice to former British Steel members reviewed by the FCA appeared to be suitable, 47 per cent were unsuitable and 32 per cent contained information gaps.
One small crumb of comfort, maybe: the FCA has also told DB transfer clients they don’t need a CMC: “You do not need a CMC to help you argue your case as the ombudsman service will investigate independently. If you decide to use a CMC, they are likely to charge you for this service.”
Given the trend of recent years, this might be one more piece of good advice that is ignored.