UK watchdog threatens to shut ‘problematic’ pensions advisers
Britain’s markets watchdog threatened on Tuesday to close “every single advisory firm” that continues to wrongly tell people to cash in their defined benefit pensions.
Megan Butler, executive director of supervision at the Financial Conduct Authority (FCA), said the behavior among financial advisers was “shocking” and “problematic”.
Lawmakers have criticized the FCA for being too slow to stop advisers telling steelworkers in Wales to cash in their defined benefit pensions that are pegged to salaries rather than the ups and downs of the stock market.
At the time, the steelworkers were faced with several options ahead of an expected company merger. Britain’s pension “freedom” reform mean that people can cash in pension pots.
The FCA has said that in most cases it was best not to transfer a defined benefit pension, but that financial advisers were still recommending transfers in most cases, Butler said. Advisers earn commission if a client shifts a pension into a new financial product.
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