The FCA has published an update on its work relating to defined benefit (DB) pension transfers to assess the advice consumers are receiving from firms and whether they are at risk of harm.

Key messages from the FCA include that some firms:

  • are not giving enough attention to customer outcomes when changing their business models, in the wake of the pension reforms;
  • have not taken on board the alert the FCA issued in August 2016 concerning the general risks associated with firms accepting introductions from unauthorised introducers or lead generators; and
  • had designed processes and procedures which result in transfers where the suitability of advice could not be established by the firm. This included firms failing to obtain enough information about clients’ needs and personal circumstances.

The FCA expects firms to consider the update and previous alerts and take appropriate steps to comply with the relevant requirements.

The FCA intends to carry out a further phase of supervisory assessments starting in the current business year.

View FCA update on defined benefit pension transfers work, 3 October 2017