FCA data on DB pension transfers – AJ Bell comment

Tom Selby
19 June 2019

The FCA has today issued a detailed analysis of the size and value of the Defined Benefit pension transfer market - https://www.fca.org.uk/publications/multi-firm-reviews/defined-benefit-pension-transfers

Tom Selby, senior analyst at AJ Bell, comments:

“The fact the majority of people who take DB transfer advice are being advised to give up their valuable guaranteed benefits is understandably a cause for concern for the regulator and this is reflected in the strong statement it has issued today.  

“Advisers who have recommended DB transfers to clients are firmly in the FCA’s cross hairs and can expect further scrutiny over the coming year. While preventing consumer harm must remain the regulator’s central priority, it should be careful not throw the baby out with the bathwater. 

“Clearly putting a stop to inappropriate advice is front-and-centre for the regulator, but in pursuing this aim the FCA needs to be mindful of the impact any action could have on the supply of advice and the ability of people to transfer where it is in their interests. Whether to transfer out of a DB pension is a complex decision based on a number of factors specific to the individual involved and advisers are best placed to make that assessment.

“It’s worth noting a heady cocktail of pensions freedoms, DB pension scheme deficits and record low gilt yields over the past few years have created an environment where pension transfers will have looked more attractive to people and this is perhaps reflected in some of the figures announced by the FCA today.”

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