Northamptonshire-based David Williams IFA is the latest firm to stop advising on DB pension transfers; as the financial watchdog continues its review of the advice market, with a particular focus on DB transfers to defined contribution (DC) schemes.
The FCA has asked the firm to “immediately cease to provide advice in relation to the transfer, or conversion, of safeguarded benefits under a pension scheme to flexible benefits”, a note on the regulator’s website said.
Cease to advise
Last month, the FCA told Strategic Wealth UK to cease all pension related business until a review was completed.
Earlier in the year, Bank House Investment Management was barred from carrying out business, such as advising on investments, after an investigation by the regulator into its pension transfer practices revealed the switches had seen many clients move their savings into self-invested personal pensions (Sipp) which had underlying investments in unregulated assets.
The note on the FCA’s website does not specify whether or not David Williams IFA will have to undergo a similar review.
FCA crackdown
The work is part of the FCA’s investigation into DB transfer advice.
Data released to International Adviser under a freedom of information request earlier this month found that between 6 April 2016 and 5 April 2017 the regulator took action to stop at least eight UK firms conducting and/or arranging overseas pension transfers in that financial year, including deVere and Holborn.
The FCA, however, declined to name all the companies that were either voluntarily restricted or banned from carrying out pension transfers.
The moves are part of the regulator’s crackdown on firms advising on domestic and international pension transfers.
The regualtor is concerned that consumers receiving pension transfer advice are at risk of transferring into unsuitable investments, or even being scammed.
Regulation proposals
In February, the FCA warned that individuals were at “serious risk” of getting the wrong advice to transfer out of their defined benefit pension schemes.
Last month, the FCA proposed overhauling the rules for advising on DB to DC pension transfers.
They include requiring transfer advice to be provided as a personal recommendation and replacing the current transfer value analysis with a comparison to show the value of the benefits being given up.
“Our new approach should better equip advisers to give the right advice so that consumers make well-informed decisions,” the FCA said.
