The Financial Conduct Authority (FCA) published its defined benefit advice assessment tool (Dbatt) to help the market understand how the regulator looks into the suitability of advice given on DB pension transfers.
The tool has already been used in the FCA’s latest review of the space.
The Dbatt will be used to scrutinise DB transfer advice given up until October 2020. This is because rules were changed on 1 October – including the ban on contingent charging – and an updated tool encompassing the current regulatory framework will be published in the next few months, the regulator added.
The FCA said: “The tool sets out the key factors to consider when checking the suitability of advice and disclosure, thereby allowing firms to understand what is expected. We are publishing it now to give all firms access to this tool and recommend that firms, compliance consultants, auditors, insurers and trade bodies use it to understand how suitability should be assessed.
“Making the tool widely available is part of our work to improve the suitability of DB transfer advice. We have been conducting intensive supervisory work on DB transfers since 2015 and we have taken action against pension transfer advisers where advice has been unsuitable.
“We have published rules and draft guidance to improve the quality of DB transfer advice. We will publish finalised guidance alongside the updated Dbatt.”
