The Financial Conduct Authority published proposals on advice relating to pension transfers where consumers have safeguarded benefits, primarily transfers from defined benefit (DB) to defined contribution (DC) pension schemes.
The regulator said the changes build on an FCA alert in January that highlighted concerns that consumers receiving pension transfer advice are at risk of transferring into unsuitable investments or – worse – being scammed.
They include:
- replacing the current transfer value analysis requirement (TVA) with a comparison showing the value of the benefits being given up;
- introducing a rule to require all advice in this area to be provided as a personal recommendation, which fully reflects the client’s circumstances and provides a recommended course of action;
- updating our guidance on assessing suitability when giving a personal recommendation to convert or transfer safeguarded benefits, so that advisers focus on whether a transaction is right for a particular individual; and,
- introducing guidance on the role of a pension transfer specialist.
