The Financial Conduct Authority (FCA) sent 125 letters to wealth firms, as of the end of January 2020, regarding advice given to retirees, a freedom of information (FOI) request sent by publication Citywire revealed.
The advice businesses were selected at random, the financial watchdog said in its letter seen by International Adviser.
Every single event
“In our work on Assessing Suitability Review 2, we want to obtain further information on the retirement income advice provided by firms,” the regulator said.
The first review was carried out in 2016 and focused on the suitability and disclosure rules in the ‘Conduct of Business’ sourcebook.
The FCA asked advice firms to log every single retirement income ‘advice event’ which happened between 1 October 2018 and 30 September 2019.
“An individual retirement income advice event is a formal personal recommendation that’s given to a client in relation to withdrawing assets from a retirement income product, that can be evidenced by signed and dated documentation,” the watchdog explained.
Even if the same recommendation was given to several clients, they should be considered singularly.
Similarly, if more than one recommendation was given to an individual client, each one should be logged as an ‘advice event’; and the same applies if the advice encompassed multiple products.
Under the microscope
The FCA’s scope does not stop at retirement-specific products, however.
The regulator asked advisory firms to include any retirement-linked recommendations given to clients aged 55+ relating to non-pension investments.
Equity release and advice on defined benefit (DB) pension transfers were excluded from the review’s remit.
The watchdog’s deadline for responses was 13 February 2020, and it will get in touch with the 125 firms about its findings by the end of the year, the FCA said.
