Regulatory oversight
The UK pension transfer industry has been under the Financial Conduct Authority’s microscope for a while, with little indication that the watchdog is going to let up any time soon.
The FCA fired a warning shot at pension transfer firms in January, expressing concern that consumers were “at risk of transferring into unsuitable investments or, worse, being scammed”.
A freedom of information request revealed that, in the year to January 2017, 16 firms agreed to stop activities related to pension transfers, 13 stopped self-invested personal pension scheme (Sipps), and 23 stopped all activity related to pension switches.
Cease and desist
DeVere UK was ordered to “immediately cease” providing advice on overseas pension transfers in February 2017, and could therefore not be included in the FOI data.
A spokesman for the company said at the time that deVere UK had “entered into a voluntary requirement to cease providing advice in this arena” and is working “alongside the FCA’s appointed independent body through the section 166”.
Section 166 gives the UK regulator the power to obtain a view from a third party “about aspects of a regulated firm’s activities” if they are concerned or want further analysis.
Another firm that fell foul of the watchdog was Holborn Assets, which was ordered to “immediately cease all pension transfer business, particularly that introduced by overseas advisers”, in March.
All such business has ceased until independent verification, via a skilled person, is provided to the FCA that a robust and compliant advisory process is in place in respect of the business introduced by overseas advisers.
Unlike deVere, Holborn was sanctioned under section 55L of the Financial Services and Markets Act (2000), highlighting the various tools at the regulator’s disposal to investigate pension transfers.
