The Complaints Commissioner has sided with the financial watchdog over accusations it regulates defined benefit transfer advice on an "ad hoc basis".
The Financial Conduct Authority has stepped up its supervision of the defined benefit pension transfer market in recent months and in a decision published this week its own watchdog defended it from claims it only carried out regulatory checks on advisers as a result of "press coverage concerns" and not periodically.
The complainant turned to the Complaints Commissioner after the FCA intervened with an advice firm which was in the process of transferring their defined benefit pension to a personal pension in 2017.
The regulator's supervision team received information about the advice firm in November 2017, which resulted in the business agreeing to cease defined benefit transfers and having its permissions removed in May 2018.
As a result, the complainant's pension remained in the defined benefit scheme until they found another adviser to complete the transfer.
The consumer complained to the FCA, claiming it should have acted against the advice firm sooner and that its register had been "inaccurate" in citing the level of permission held by the company in relation to pension transfers at the time he wanted to transfer.
They also maintained the FCA's supervision of the firm and its adviser had been "lacking" by only acting when receiving intelligence on the company rather than pursuing "planned reviews".
They told the FCA it should have suspended the firm's permissions and updated the register on the date it first received information on the adviser, and not waiting another six months.
But the FCA said: "We don’t usually make public the fact that the FCA is investigating a firm or individual.
"This is partly to protect the effectiveness of any investigation, as publicity might encourage people to destroy or hide evidence, and partly because announcing an FCA investigation can damage reputations of potentially innocent parties or firms that are able to rectify issues we have identified.
"It’s important to note that just because the FCA is investigating a firm, it does not necessarily mean that the firm will be found to have breached our rules."
The complaints commissioner sided with the regulator and did not uphold the complaint against its supervision, finding it had been "reasonable" and acted "promptly" when concerns were drawn to its attention.
But the commissioner did sympathise with the delay to the consumer's complaint, which took the FCA 20 months to investigate and for which it apologised and offered £200 in compensation.
Antony Townsend said: "I understand your frustration about the delay. Yours is far from the only recent complaint which has suffered from delays in the FCA.
"Your complaint was a relatively straightforward one, and the length of time it took for you to receive a decision is inexcusable.
"This is a matter which I have discussed with the FCA on several occasions, and it has now increased the resources of its Complaints FCA00637 - 4 - Team, which should help to reduce the risk of these kinds of unacceptable delays."
The FCA is in the midst of a market wide review of defined benefit transfer advice, with the regulator confirming earlier this week it had written to 1,600 firms in which it has identified a risk.
The crackdown comes after the regulator voiced concern about the volumes of recommendations to transfer it had seen in a survey of 3,015 firms between April 2015 and September 2018.
The FCA found 69 per cent of clients had been recommended to transfer out of their scheme despite the watchdog's firm stance that this is likely to be unsuitable for most clients, with an average transfer value was £352,303.
rachel.mortimer@ft.com
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