Last month I wrote a blog complaining that the latest hoo-ha about DB transfers and, in particular, the media coverage and political commentary that followed the FCA’s June 2019 announcement that they were taking further action on defined benefit transfers. My frustration was that the noise was all based on data up to Sept 2018, before the FCA’s excellent ‘PS 18⁄20 Improving the quality of pension transfer advice’ had had any impact.
The data the FCA published on June 19th 2019 was based on a survey of 3,015 firms and found that between April 2015 and September 2018 70% of those advised had been recommended to transfer. This was before the FCA defined triage and made it a requirement of a compliant DB review process.
Using stats reflecting what was happening in a market before their PS 18⁄20 intervention to justify launching a further intervention has raised a few eyebrows and much discussion in our community. I think we were all a bit shocked when, at 7am on July 30th 2019, ‘FCA CP 19⁄25 Pension transfer advice: contingent charging and other proposed changes’ was thrust upon us!
Interestingly, the data we have collected from advisers who use our Adviser Portal’s outcome feature, shows the number of enquirers who are being recommended to transfer now is substantially below the 70% figure, suggesting last years FCA intervention, including triage, may be having its intended impact.
We introduced the outcomes feature in early May 19 following the launch of the PFS Gold Standard. It makes it straightforward for users to meet principle 8 of the standard, ‘Transparency in advice processes and outcomes’, and puts outcomes data, which is invaluable for PII negotiations and regulatory questionnaires, at adviser’s fingertips. The data we have collected is post May 19 and therefore bang up to date.
Our data is based on over 500 records and the number will increase further as more of our adviser community become aware of the outcomes feature and use it as part of their DB process.
Interestingly, back in June 19 the FCA also stated, “One reason a firm may be recommending a large number of clients to transfer is if the firm has a robust initial guidance service triaging clients.” It may be useful for advisers to have this quote to hand when the regulator comes knocking!
Finally, it’s good to see the FCA have recognised the power of video to communicate with consumers considering the DB pension. Their new video, which aims to help consumers recognise adviser good practice offering DB reviews, went live this week - just eighteen months after Money Alive launched its PMI accredited Stay or Transfer consumer educational video journey.