More than 700 adviser firms advice firms relinquished their defined benefit (DB) transfer permissions during the regulator’s probe into the market.
In an update published on Friday morning (5 June), the regulator revealed hundreds of firms had left the market since its probe began, and it was in the process of 30 enforcement investigations that arose as a result of its work.
Of the 745 firms that amended permissions as a result of the FCA’s probe, 55 did so because they did not have appropriate professional indemnity insurance cover in place.
The update showed the suitability of defined benefit (DB) transfer advice has risen overall, but the FCA remained concerned by the number of files where the advice appeared unsuitable.
It said the suitability of advice given in the area had risen from 47% in previous years to 60% in 2018.
However, the FCA found nearly one in five files (17%) were still either unsuitable or had gaps in information. The regulator said this figure was still “unacceptably high”.
In 2018 the FCA sent firms a marketwide DB transfer survey, marking the final phase of the FCA’s multi-firm supervision exercise on DB transfers.
A freedom of information (FOI) request sent by Professional Adviser to the regulator earlier this year revealed some 3,026 firms were set to receive the questionnaire.
Writing to steelworkers
The FCA found there was a higher number of unsuitable files relating to advice given to members of the British Steel Pension Scheme (BSPS).
The financial watchdog reviewed BSPS files and found just one in five (21%) appeared to be suitable, while nearly half (47%) were unsuitable and a third (32%) appeared to contain information gaps.
As a result, the FCA will write to all 7,700 firms members for whom contact details are available and who transferred out, which it said would help them revisit the advice they received.