Last week I was on holiday so at something of a distance from the FCA’s announcement on June 19th regarding further action on defined benefit transfers.
The statement gave rise to significant coverage in consumer press about the failings of the industry - often implying it is driven by greed and damn the clients.
We are all painfully aware of that bad practice that has taken place in the market and the resultant heartache (which I have seen with my own eyes in Port Talbot). However, there have always been outstanding practitioners operating in this area and, thanks to the adoption of new rules introduced by the FCA at the beginning of 2019, there are now many more.
What I hadn’t quite appreciated from my haven last week was that all the media furory, which continued on Radio 4’s Moneybox over the weekend, related to data based on practice between April 2015 and September 2018. This includes a time where record high transfer values were getting lots of publicity in the consumer press - no doubt driving lots of enquirers to adviser’s door and, even more significantly, before the impact of the all the hard work done by the regulator in 2018. The FCA’s ‘Improving the quality of pension transfer advice’ began with a consultation in March 2018, it was published in October and implemented in January 2019.
Last years hard work by the regulator prompted fervent activity in the industry who were keen to understand and adapt to the new regulations. Countless discussions, webinars, roadshows, compliance reviews, implementation meetings, tech developments, conferences and business process changes took place covering topics including APTA, TVC and Triage.
Whilst better practice now does not excuse selective poor practice historically I do question the tone of some of last week’s press commentary, and from the regulator too. I do not believe they reflect the enormous steps forward the industry has taken - ironically much of it driven by regulatory change.
As well as implementing new rules, recent initiatives like the PFS’s Gold Standard have been painstakingly developed to support advisers who, like the vast majority, want to offer the very best service for their clients.
One final comment regarding the FCA’s data last week about triage which suggested over the period covered (which ended 4 months before triage was made mandatory) that only 55% of respondents provided data. I am sure that once data is collected on outcomes post the implementation of the triage rules, where 100% of enquirers are triaged and 100% of advisers provide data, the FCA’s expectation that “transfers are likely to be unsuitable for most clients” will be satisfied.
Money Alive work with hundreds of advisers operating in the DB review market and engage with them regularly regarding our product and the marketplace. They have used our platform’s interactive, PMI accredited video journey to engage and educate over 4,500 DB enquirers and to record data on enquirer numbers, reviews and outcomes. The feedback from advisers and clients suggest the market is a far more professional and customer focussed place than last week’s news suggests and I look forward to seeing up to date data, reflecting current industry practice, in due course.