Jun 21, 2019
The suitability of advice to transfer from a defined benefit (DB) pension scheme to a personal pension has faced a great deal of regulatory scrutiny in the past couple of years.
Deciding to transfer a promise of guaranteed income to the uncertainty of an invested capital value is far from simple. This choice represents one of the most complex personal finance decisions we will ever have to make.
As a result of this complexity involved, it’s right that the Financial Conduct Authority (FCA) subjects advisers who offer this advice to a high level of scrutiny.
The consequences for an investor making the wrong choice to transfer are severe and potentially very damaging to wealth in retirement.
The FCA has repeatedly communicated what it expects from financial advisers who advise transferring (or retaining) a defined benefit pension. They have also been taking more enforcement action against the minority of adviser who fails to live up to the high standards expected.
In their latest update, the FCA has concluded that too much DB transfer advice remains below their acceptable standard.