The UK’s Financial Conduct Authority (FCA) is proposing a ban on contingent charging and wants to force advisers to demonstrate why their recommended scheme is more suitable than a workplace pension scheme.
The FCA found that 69% of consumers were advised to transfer and that most would have been better off not moving their accounts. The regulator stated it had “serious concerns” about how advisers charge for advice, and that distrust in the quality of pension transfer advice was growing, according to the statement.
In a consultation paper out Tuesday, July 30, the watchdog stated that given the advantages of defined benefit pensions, the proportion of consumers advised to transfer out was too high.
“The FCA’s supervisory work has revealed continued problems in the pensions transfer advice market,” Christopher Woolard, executive director of strategy and competition at the regulator, said in the statement.
Full Content: Bloomberg