Advice firms that did not answer FCA DB probe could see permissions revoked

Hannah Godfrey reports...

Financial advice firms that did not respond to the FCA’s market-wide defined benefit (DB) transfer questionnaire could see their regulatory permissions revoked, RP’s sister publication Professional Adviser understands.

A freedom of information request by PA revealed seven advice firms could not be contacted by the Financial Conduct Authority (FCA) as it tried to find out more about DB transfer advisers in its recent market probe.

PA understands the financial watchdog will try to track down those firms but, in more extreme cases where firms still cannot be contacted, the FCA may remove regulatory permissions.

PA’s inquiry also revealed the regulator had not yet engaged with any advice firms solely on account of the information provided in the data request. The regulator said the information was being reviewed to determine if any further work was needed, and that the data collected was helping to inform its wider supervision of firms.

In the final quarter of 2018 the FCA sent questionnaires to 2,868 firms holding pension transfer permissions.

The regulator’s survey asked in-depth questions about DB transfers carried out by each firm, such as how many clients the firm had advised to transfer their DB pension, the average value, the number of insistent clients the firm had dealt with, and the number of clients introduced through unregulated introducers.

The surveyed firms had until 3 December to provide the regulator with the requested information, but many missed the regulator’s deadline.

A previous freedom of information request from PA revealed some 130 firms missed the deadline set by the FCA and requested additional time and provided their response within a week. A further 13 firms responded later than one week after the deadline.

‘They deserve what is coming to them’

Informed Choice Chartered financial planner Martin Bamford said it was not a particularly challenging questionnaire and so firms should have got back to the regulator.

“Firms that couldn’t get their act together in time, without a really good excuse and prior engagement with the FCA over the matter, deserve what’s coming to them,” he said. “It wasn’t an especially challenging questionnaire to complete, with a little data-mining needed to collate the right information.

“Firms must stay on top of their product and advice data, so they can use it for regulatory returns, when applying for professional indemnity insurance renewal, and for sound business management in general.”