The Financial Conduct Authority have written to a further 950 people who have transferred out of DB schemes, warning them they may have been mis-advised and could be entitled to compensation.
These pension savers all received advice from one of 10 firms that have since gone into liquidation.The regulator says that business reviews suggest these firms have given unsuitable advice to some customers.
Although these firms have ceased trading these customer may be able to pursue a claim with the Financial Services Compensation scheme, although this will limit maximum payouts to £85,000. For firms still in business the maximum payout is almost twice this amount, at £160,000.
These latest notifications mean the FCA has now written to around 3,500 people who have transferred out of DB schemes. Separately the FCA has also written to 7,770 former members of the British Steel Pension Scheme, in both cases warning savers they may have had unsuitable advice to transfer their benefits.
The FCA says the DB pension transfer advice market is particularly susceptible to consumer harm and improving this market continues to be a key area of focus. Where harm has been caused, the FCA’s aim is to ensure that it is remedied and that consumers receive appropriate compensation.
The FCA recently published its Consumer Investments Strategy, which sets out a three year plan to address potential harm to investors. Improving outcomes for consumers transferring from DB pensions to defined contribution schemes is at the centre of this strategy.
All firms providing DB pension transfer advice should follow the FCA’s Finalised Guidance, so that they understand the processes they need to put in place to give suitable advice. The FCA will continue to monitor this market through regular data collection and its ongoing programme of supervisory work.