Two advice firms have voluntarily given up their defined benefit transfer permissions following intervention from the regulator.
A Freedom of Information request, submitted by FTAdviser, found two firms “voluntarily varied their permissions” following the FCA’s data request to firms advising members of the Rolls-Royce DB scheme last year (October 2020).
The regulator confirmed that no firms had their permission “taken away” as a result of its investigation into Rolls-Royce.
But two had acted voluntarily and a further six firms have been asked for further information.
The FCA said it had not taken any enforcement action, such as withdrawing a firm's authorisation or stopping individuals from carrying out regulated activities, but said it was “following up with firms where poor advice has been identified”.
Dominic James Murray, chief executive officer and independent financial adviser at Cameron James, said he was pleased to see the FCA taking a more active approach.
Murray said: “What happened with British Steel highlighted some major flaws of the UK DB final salary pension transfer process.
"We welcome the FCA tackling any firms who may have provided clients with substandard or damaging advice.
“Tightening up ultimately protects all our future clients at Cameron James for whom a final salary pension transfer may be suitable and in their best interests.”
The regulator revealed it would be looking into advice given to Rolls-Royce pension members in a joint statement with the The Pensions Regulator (TPR) and the Money and Pensions Service (Maps) back in October.
This came after the scheme saw a surge in the number of DB transfer requests as a consequence of redundancies.
As a result, the FCA sent a data request to 65 advisers who advised clients looking to transfer out and said it would take action where there was evidence of poor advice.
Crackdown on DB transfer advice
The regulator has probed firms multiple times over the past couple of years as part of its ongoing crackdown on unsuitable advice in the market.
Last year it said hundreds of firms had quit the market following its intervention and warned too many firms were still failing to collect the necessary information to provide advice.
In 2019 almost 80 per cent of advisers in the defined benefit market were probed about their transfer advice as part of the regulator's crackdown, with the watchdog writing to more than half of the 2,500 advice firms in the sector expressing concerns.
Earlier this year, data from the FCA showed the number of active firms in the pension transfer market had declined from 2,426 firms in 2015-18 to 1,310 firms in 2018-20.
But there were 103 (6 per cent) new entrants to the market. Overall, the regulator said there were currently 1,521 firms with DB transfer advice permissions.
The City watchdog is expected to continue reviewing firms’ DB advice until at least spring 2022.