This likely comes as little surprise, but some argue it is a draconian measure. It will obviously narrow the advice available on such transfers much more, though previous regulatory changes and the PI market have already cut the number of advisers offering such advice.
It is interesting that FCA data says that around 60 per cent of transfer cases were suitable in 2019 with another significant chunk poorly documented and 17 per cent unsuitable. The FCA has decided to stop what it sees as a likely conflict of interest that isn't being managed properly.
Among other things, the FCA also found that a huge amount of the advice delivered to British Steel Pension Scheme transferees was unsuitable. The headline says the majority, but 47 per cent were unsuitable, 32 per cent contained information gaps and 21 per cent were suitable. All 7,700 transferred members will now be written to by the regulator to help them “revisit the advice and complain if they need to”.
Advisers will be unhappy about this phrasing in the guidance highlighted by New Model Adviser.
"Ongoing advice charges create a conflict of interest, as an adviser may have a strong monetary incentive to recommend one course of action over another. Over time, these charges can have a significant negative financial impact on the consumer’s transferred funds and, as a result, the pension income they can take.
"The default fund in a WPS should be appropriate for all members without the need for ongoing advice. Given the high-charging products that many consumers are currently transferred into, our proposed changes would also reduce the product charges for consumers who transfer in future. This is because a WPS is typically cheaper than many advised solutions."
The Lighthouse Group is one of 30 groups facing enforcement action over transfers, a statement from parent Quilter confirms. Some £12m has been set aside.
Investors in the Woodford Equity Income fund are set to get another tranch of their money back, having received around 75% of the value of their assets in distributions in January and March.
The latest sale of healthcare assets – among the illiquid holdings - puts a value on the fund of £444m but £114m less than the £558m estimated by Morningstar as at May 20, 2020.
Law firm Nelsons is examining the potential for claims against Link Fund Solutions over the Woodford closure and unwinding.
Draft legislation set down by the government will allow the pursuit of company directors and the self-employed for furlough fraud. The article has nteresting quotes from Tim Stovold. head of tax at Moore Kingston Smith, warning that directors whose non-compliance with the furlough scheme was accidental could also fall within the rules.
He adds: "Although these rules apply to fraudulently claimed furlough grants, they will also apply where the company has not understood the complex rules of the scheme and claimed the grant in error.
"HMRC is paranoid about fraud but these powers could make a director liable to repay an amount they never benefitted personally from in the first place."