The PLSA have issued a statement following the Financial Conduct Authority (FCA) announcing a package of measures designed to address weaknesses across the defined benefit (DB) transfer market.
Craig Rimmer, Policy Lead: Master Trusts, PLSA, said: “The PLSA has consistently called for a ban on contingent charging. With its model of only paying the adviser if the pensions transfer goes ahead, contingent charging has been a perverse incentive that has resulted in far too many unsuitable DB transfers happening.
“With savers vulnerable to making hasty financial decisions during the uncertainty arising from the pandemic, our disappointment is that the ban is not happening even sooner. It would be better to raise the quality bar for pension transfer advice now rather than wait until 1 October.
“We support the FCA’s view that workplace pension should be considered first as a destination for any pension transfer – with generally lower charges and default investment strategies suitable for the majority of people they provide a straight-forward and affordable path for advised savers. We are pleased to see the FCA’s new package of measures to address the issues around advice for DB transfers and believe this is an important step to ensuring savers are given the best chance of achieving a good income in retirement.”
Mark Smith, Senior PR Manager
020 7601 1726 | [email protected]k
Steven Kennedy, PR Manager
020 7601 1737 | 07713 073024 | [email protected]