FCA to send second in-depth marketwide DB questionnaire imminently

Hannah Godfrey reports

The Financial Conduct Authority (FCA) will send a second marketwide in-depth questionnaire on defined benefit (DB) transfers to firms later this week, RP’s sister title Professional Adviser reports.

Nearly 2,000 firms will receive the questionnaire by email on Wednesday 1 July and will have 30 days to complete and return the survey.

The survey will be sent to every firm with full DB transfer permissions and will contain approximately 30 questions.

Advisers will be asked for information on DB business that took place from 1 October 2018 to 31 March 2020, following on from the regulator’s first in-depth marketwide survey, which asked for DB business information between April 2015 and September 2018.

Advisers will be quizzed on how many clients have been recommended to transfer and not to transfer. They will also be asked questions on insistent clients, triage and their firm’s average transfer value.

Questions will also be asked on the percentage of total income that comes from providing pension transfer advice and the number of clients who did not take ongoing advice, as well as the number of pension transfer specialists at the firm, the range of charges available and professional indemnity insurance.

PA understands going forward such questions could be included as part of advisers’ regular regulatory returns.

In 2018 the FCA sent firms a first 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 at the time revealed some 3,026 firms were set to receive the questionnaire.

In June 2019 the regulator released the results of the first survey. The FCA said the results made for concerning and disappointing reading because firms were recommending large numbers of transfers. The survey found 69% of the 234,951 total pension scheme members seeking advice had been recommended to transfer.