Advisers who have outsourced their pension transfer work to specialists have provided inaccurate information, according to Financial Conduct Authority (FCA) executive director of strategy and competition Christopher Woolard.
In a letter to Work and Pensions Committee chair Frank Field, Woolard (pictured) said the watchdog had seen examples where advice firms without pension transfer qualifications had referred work on to specialists along with inaccurate information.
He said: “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 accurate.”
Woolard said the FCA had reacted to protect consumers by visiting firms, reviewing files and, where appropriate, accepting voluntary restrictions on their permissions.
He continued: “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.”
Woolard said all firms the regulator had assessed so far as part of its defined benefit (DB) transfer work had had in-house pension transfer specialists who had either given the advice or checked the advice given by another adviser within the firm.
Multi-firm supervision exercise
The FCA is set to collect data from all firms that hold the transfer permission with the intention of assessing practices across the entire market. This will constitute ‘phase four’ of its multi-firm supervision exercise on DB transfers.
A freedom of information request submitted by Professional Adviser last summer revealed the FCA had looked into 92 firms at the time as part of its probe into the market.
Last month, the FCA confirmed it had abandoned plans to drop the unsuitable DB transfer assumption as a result of concerns about unsuitable advice being given in the area. In October, it found fewer than half of the DB transfers it reviewed – where the recommendation was to transfer – were suitable.
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