The Financial Conduct Authority (FCA) is looking to require adviser firms with pension transfer permissions to submit data to the regulator on a six-monthly basis.
In consultation paper CP 19/25, published on Tuesday morning (30 July), the financial watchdog proposed adding a new section to the Retail Mediation Activities Return (RMAR) form on pension transfer specialist advice.
The FCA said the additional data would enable the regulator to monitor the number of consumers firms advise to transfer, the take-up of ongoing advice services and the charging structures that firms use to provide pension transfer advice.
It said it would also give it more information about the size of the pension transfer market, including the number of pension transfer specialists firms employ, and the use of introductions for advice on pension transfers.
Data on PI exclusions
Proposed changes to the RMAR also included requiring additional data from firms on their professional indemnity (PI) insurance cover. The FCA said this would help it better monitor changes in the PI insurance market following developments such as the Financial Ombudsman Service (FOS) compensation increase, and give the regulator more details about the PI cover firms have in place.
In its consultation, the FCA said: “In March 2019, we introduced new rules to increase the FOS award limit from £150,000 to £350,000.” The increase applies to complaints referred to the FOS about acts or omissions by firms on or after 1 April 2019.
The regulator continued: “Consultation feedback highlighted the potential impact of the new rules on the price and availability of PII cover for activities carried out by firms that are subject to the £350,000 award limit.
“As a result, we want to ensure the data we collect on firms’ PII cover, particularly for firms that undertake high-value business such as DB pension transfer advice, allow us better to identify developments that could adversely impact consumers.”
The FCA said it therefore proposed to:
- Require firms to confirm if they have no exlusions or limitations to their PI cover;
- Collect new data on whether exclusion apply to past or future business or both; and
- Collect new data on the nature of the exclusions.
The changes will impact all firms required to submit RMA-E, FSA031, FSA032 and FIN-APF. The FCA has proposed to introduce the changes for firms’ submissions due on or after 1 October 2020.