Improving the quality of pension transfer advice: a response to FCA consultation paper CP18/7
The FCA’s CP18/7: Improving the quality of pension transfer advice (May 2018) sought views on new issues raised from CP17/6 (September 2017) and PS18/6 (March 2018).
The consultation comes during an important time; the industry is seeing a significant rise in DB to DC transfers in the new retirement market, while the FCA identified areas of poor practice in this segment of adviser work in late 2017.
The PLSA’s response is supportive of the vast majority of proposals in CP18/7, as the suggestions strengthen and raise the quality control of advice for consumers. However, any regulatory interventions to protect retirement outcomes in DB to DC transfers must not translate into costs being passed onto consumers. The PLSA also supports a ban on contingent charging and urges the immediate collection and public release of data in two specific areas of DB to DC transfers: (a) scope and scale of consumer demand and (b) details on different charging structures and fees.