On 15 January 2021, the FCA published a Defined Benefit Advice Assessment Tool (DBAAT).
Supervising defined benefit (DB) transfers has been a key priority for the FCA since the pension reforms, commonly known as the ‘pension freedoms’, were introduced in 2015.
The DBAAT is designed to help firms and pension transfer specialists understand the FCA’s file review methodology for DB transfer advice. Before using the DBAAT firms must sign the FCA’s DBAAT licence agreement. Firms can use the DBAAT to assess the suitability of DB transfer advice and the adequacy of client disclosure they gave before October 2020. The DBAAT does not incorporate the new rules that came into force on 1 October 2020. The FCA will publish an updated DBAAT for use by firms for the DB transfer advice they gave from 1 October 2020. The FCA will also publish the Finalised Guidance to Guidance Consultation 20/1 which will help firms understand what the FCA expects from them when they give DB transfer advice. The FCA aims to publish these in the coming months.