Pension Transfers in the Headlines Again…
What is the issue?
The FCA has issued the results of its recent work on the standards of pension transfer advice and has concluded that in less than 50% of cases reviewed was the advice given suitable. The levels of unclear (23%) and unsuitable (29%) were up on the previous supervisory exercise undertaken by the FCA and the regulatory has hinted at dire consequences for firms that do not abide by the rules and achieve higher levels of suitable advice.
The target of this latest review was focussed and may not be fully reflective of the overall advisory standards in the industry but it does serve as a warning to firms to ensure that their business models and advice processes are fit for purpose and keep up with regulatory developments.
What should firms be doing now?
All firms active in pension transfers should be considering reviewing their business to ensure that the model does not lean towards the provision of unsuitable advice. Governance arrangements should be checked and the advisory process examined to ensure that no systemic issues exist. It may also be necessary to sample review past cases to establish if there is a historical problem and upgrade quality control processes provide assurance that future standards are acceptable. This is particularly pertinent given the forthcoming SM&CR regime where senior management will be directly accountable for the conduct risk standards in the business.
How can Complyport help?
We have extensive experience of reviewing systems and controls and of assessing the suitability of client advice, both on a past review and ongoing basis. We are skilled in assessing the standards of pension transfers and can provide assurance on the standards firms are achieving and provide assistance to resolve any weaknesses identified.
If you would like to discuss how we can help you, please contact Simon Chapman – Simon.Chapman@complyport.co.uk