R E G U L AT I O N
TRANSFER TALK The FCA has raised concerns about the sustainability of pension transfer advice but advisers believe it is down to the dodgy minority. Rory Percival urges prioritising needs over wants
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PORTRAIT BY LUKE WALLER
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e are all familiar with the issues around defined benefit (DB) pension transfer advice – unsuitable advice, professional indemnity (PI) cover, continuing Financial Conduct Authority (FCA) supervision and policy developments, among others. Unfortunately, I do not see any quick and easy resolution to these issues. In my opinion, there is only one way to resolve the issue in the medium term and that is for the advice sector as a whole to raise standards, particularly raising the rate of suitable advice cases. In time, this will mean the FCA will no longer feel the need to continue its extensive work in this area and the PI cover issues will improve. But the advice sector will not improve standards until it sees that it is part of the problem. It seems that every adviser or firm I speak to (or read about in the press or social media) believes the problem is down to a few dodgy firms – it’s not us, it’s someone else. I am completely convinced that this is not how the regulator sees it, based on my experience at the
FCA, several speeches and roundtable meetings with the FCA since, as well as the regulator’s update on supervisory findings from December 2018, which highlighted issues around normal firms just not doing their job well enough. n the FCA So, where are the differences between and some (many?) advisers? I would flag three areas where there may be differences: 1. Pensions are for retirement income In the context of pension freedoms, FCA y said: supervision director Debbie Gupta recently ted “The risk here is that people may be distracted ch is from the original purpose of a pension, which to provide them with money when they are no ny longer working.” Yes, the freedoms allow many st options and great flexibility for clients, but first and foremost, clients need an income to live offf e in retirement. Or, as the FCA said: “Good advice should seek to ensure that clients’ income needs are met, that they support their dependents and that they get to keep the lifestyle they have planned for.”
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