In response to some examples of poor advice on defined benefit pension transfers, the FCA has launched a consultation aimed at improving the process.
Last week the Financial Conduct Authority (FCA) published a consultation on advice on transfers of defined benefit (DB) pensions, or other safeguarded benefits. The consultation comes in response to a number of examples of poor advice being seen on DB transfers, and is also intended to update FCA rules and guidance to reflect recent regulatory changes, including the introduction of the defined contribution pension flexibilities in April 2015.
The key areas the FCA is consulting on are:
The FCA has stated that its proposals will increase the cost of advice, both as a result of one off costs such as the requirement to update systems to reflect the new TVC requirements, and an increase in the ongoing cost of providing advice.
The consultation runs until 21 September with a policy statement due in early 2018.
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