The FCA looked at data collected from firms on the Defined Benefit (DB) pension advice market, between 1 October 2018 and 31 March 2020.
This is the second set of ad hoc data we are publishing about the DB pensions transfers advice market. The first, published in June 2019, covered the period of April 2015 to September 2018. This second data set covers the period of October 2018 to March 2020. From April 2021, all firms with the DB transfer permission must report this data on a 6-monthly basis.
Overall the FCA continues to believe that for the majority of people it is not in their interest to transfer out of a DB pension. Where an individual seeks advice to transfer it is important that advice given is suitable and appropriate for their needs and situation. Where we find that firms are not meeting our expectations we will take action to ensure firms put things right.
*The data shows some signs of improvement in the DB transfer advice market, most notably:
the significant fall in conversion rates indicates that firms are starting to act more in line with our expectation and messages that for DB advice, in most cases, a transfer is not in the client’s best interest
a significant reduction in clients proceeding to transfer against advice as insistent clients
The data shows a reduction in the number of firms offering DB advice. In some cases this will be as a result of not having adequate professional indemnity insurance for DB transfer advice, other firms have given up the permission as they had not used it for an extended period. There are 1521 firms with DB transfer advice permission (at the time of publication).
All firms providing DB transfer advice should take note of our Draft Guidance and in due course, our Finalised Guidance, to check their understanding of our rules and their application, and to ensure they give suitable advice.