Megan Butler, the FCA’s executive director of supervision, said in a letter to Work and Pensions Committee member Frank Field: “In 2018, we will be collecting data from all firms who hold the pension transfer permission with the intention of assessing practices across the entire market to build a national picture.”
The letter said the FCA last year assessed 88 client files from 13 firms that offered DB transfer advice. The files showed that less than half of the clients had received advice that could be deemed suitable.
“The findings from this review, which we published in October, was (sic) enough to give us cause for concern and resulted in four firms choosing to stop advising on pension transfers following conversations with us,” Butler said.
She said the findings from the assessment were not indicative of the national picture, but subsequent analysis has shown the root cause of many issues surrounding DB transfers comes from poor business models.
“In particular, we found that some firms had ‘industrialised’ their defined benefit transfer business so that they were no longer focused on their clients’ individual circumstances and needs.
“We are continuing this work and have recently asked 45 additional firms that we know are active in defined benefit transfers for information,” Butler said.
The FCA took action to stop eight UK firms, including deVere and Holborn, conducting and/or arranging overseas pension transfers in 2016/17, a freedom of information request from International Adviser revealed in July.
