FCA delays DB transfer reforms

The Financial Conduct Authority has pushed back the implementation of its planned changes to the defined benefit transfer market by six months.

The regulator had been expected to implement the reforms, which will include plans to ban contingent charging and introduce abridged advice, during the first quarter of this year.

However, the FCA updated its website to state: “We will publish our finalised Handbook text in a Policy Statement in the second quarter or third quarter of 2020.”

The regulator issued a consultation on reforming the transfer market in July last year, following concerns that the proportion of consumers advised to transfer to defined contribution schemes was too high and that many of these transfers would not have been in consumers’ best interests.

“If the FCA believes that the consumer detriment from poor quality advice runs into billions of pounds, it is very disappointing that measures designed to improve the advice market have been delayed,” said Clive Harrison, partner at pensions consultants LCP.

“Given the particular concerns in the current Covid-19 environment about pension scheme members being vulnerable to scammers, and poor quality advisers taking advantage of members’ fears, it is vital that consumer protection measures are maintained as far as possible, despite the present situation,” he added.