UK. FCA publishes latest data on the defined benefit transfer market
The FCA has published its latest data on the defined benefit (DB) transfers market, covering October 2018 to March 2020. It has noted that there are “signs of improvement” in respect of DB transfer advice; in particular, there has been a significant reduction in conversion rates. This indicates that firms are starting to act more in line with the FCA’s expectations, as advice to transfer out of a DB scheme will not usually be in the client’s best interests.
The data also revealed that there has been a significant reduction in clients who proceed with a transfer against their adviser’s advice.
Conversely, there has been reduction in the number of firms who are willing to offer DB advice. The FCA believes this is largely due to inadequate professional indemnity insurance. Until a solution is found, there more firms are likely to cease offering this crucial type of advice.
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