FCA urged to launch full probe into pension transfer advice

JoeCrystal

I have just been reading Monevator site and it linked to FT article about that the initial review found less than half of advice given to those considering cashing in final salary schemes was “suitable”. I am starting to wonder if this is a beginning of an end and ban the transfers out of DB schemes eventually?

sandsy

Don't see why it would lead to a ban and that's not the FCA's decision to make.

The right to transfer is laid down in legislation so the government would have to make that decision. It was actively debated when pension freedoms came in so I don't see a U-turn happening any time soon.

FCA just dictate the minimum standards for advice then check to see if the standards are being followed.

dunstonh

There are a few problems

The FCA doesnt answer questions put to it by the "good" firms in the industry. There have been a lot of questions asked by firms on things like insistent clients etc and the FCA just dont answer them. Its typical response is that they have their guidelines and you need to interpret them and we will tell you if you are getting it right or not when we visit you. To be fair, the FCA is a little better than the FSA on this front but they still need to improve. So, often advisers only find out what is right (from the regulatory point of view) when they read about other firms being told where they went wrong or where the FCA carry out a review.

Another is that there are a number of pop up firms that are jumping on the bandwagon and doing DB transfers quite cheaply and in a factory line style and not doing things to the level expected. Many consumers may like that but there is no way they can meet the expectations of advice that exist nowadays.

There are some considerations being made. Such as requiring the adviser to be the one to sign off one the advice and not someone who is authorised but may never have met/spoken to the person but relying on the documentation put in front of them.

badmemory

There is an old saying about a fool and his money being soon parted. So this assumes that 49% of us are financial idiots. I have absolutely no evidence to the contrary so will go with this. So how many "professionals" actually think that dumping a DB pension is a good idea if in a relationship & without a life threatening ailment?

bigadaj

badmemory wrote: »

There is an old saying about a fool and his money being soon parted. So this assumes that 49% of us are financial idiots. I have absolutely no evidence to the contrary so will go with this. So how many "professionals" actually think that dumping a DB pension is a good idea if in a relationship & without a life threatening ailment?

It all depends on the numbers.

If you're being offered a cetv of pushing 50 then I think many would take it and would be right to do so, at what cetv it's right to take a transfer can only be answered in hindsight really.