The FCA is considering banning contingent charging in relation to defined benefit transfers – a move outlined in a new consultation paper.
It has provoked a furious debate on social media among advisers about whether the move represents an overreaction which will deny clients access to advice or protect against the sort of problems seen with transfers at the British Steel Pension Scheme.
Some consumer voices have also suggested that leaving the ability to charge a contingency fee left a loophole in the RDR; others that it is the essence of adviser charging.
Furthermore the FCA has decided to maintain the position, at this stage, that an adviser should start from the assumption that a DB pension transfer will be unsuitable.
It also plans to introduce the rule to require “all advice on the conversion or transfer of safeguarded benefits to result in a personal recommendation”.
In others words, the transfer and the recommendation have to be considered together. There is a lot in this though of course, it is clear that the wheels of regulation turn pretty slowly even in what some might call a crisis situation.
While most changes come into force in October 2018, others such as the possible ban will take longer having just been proposed.
FTAdviser outlines the changes in a point by point analysis here .
Of course, the FCA is also concerned about what Corporate Adviser calls the soaring non-advised drawdown sector. But do its concerns here run contrary to a contingent charging ban? One to discuss.
Elsewhere Frank Field has asked the Government for clarification over the position of the GKN pension plan.
Barclays agrees a £1.42bn settlement with US regulators over sales of mortgage backed securities predating the financial crisis.
Nexus managing director Kerry Nelson asks that the financial giants busy merging, selling up and transferring books of business remember advisers and the end client.