This week..
FCA not stopping the bad guys
Regarding your article ‘Contingent charging ban sees DB transfers hit record low’(Oct 14).
I am not surprised the numbers of transfers in September was lower, but I don’t think it’s the impact of the contingent charging ban.
That only applies to cases where the advice process starts after October 1, so cases undertaken in September were not impacted. It will filter through to the actual transfer in some months’ time.
Transfers take months to advise and process. Not least because the pension consultants providing the data to paraplanners like myself and the advisers we work with are slow to respond and refuse to provide full scheme information.
Also, gathering all the client data and undertaking the analysis is a long and complex process – it should be, it’s an important and life-changing decision.
The reason fewer pension transfers are being undertaken is because firms that were advising on pension transfers could not renew their professional indemnity cover.
The advisers still have clients who need the advice, but they can’t provide it. That means they cannot organise a transfer, but it also means they can’t tell a client that a transfer is not the right advice.
The regulator is not stopping the bad guys. They will continue to undertake transfers and scam scheme members.
They don’t care about PI insurance cover or regulatory reporting or calls for information; they are working outside the rules.
Heather Dunne
The Pensions Experts
Dealing with Sipps
Regarding your article ‘Adviser lands at FSCS with claims worth thousands of pounds’ (Oct 14).
Please allow me to contextualise the comments attributed to me in your article.
The comments were made in a broader interview regarding the evolution of the self-invested personal pensions market.
My choice of a timeline of 2012 was linked to the publication of the Financial Services Authority’s second thematic review of Sipp operators, which was the first occasion that the FSA had suggested there was any requirement of a Sipp operator to undertake investment due diligence.
Many of the legacy issues that have plagued the Sipp market and given rise to countless claims on FSCS arose prior to the publication of this review.
The Financial Conduct Authority could have acknowledged that their predecessor – the FSA – had failed to engage with the industry during the early years of Sipp regulation and that clear guidance was lacking.
Instead, they have chosen to interpret Conduct of Business Sourcebook rules as applying in a way which was certainly not the understanding of the Sipp industry at the time.
The recent Carey Pensions judgment addressed some of the consequences of this approach, but we now have to await an appeal to discover the extent of a Sipp operator’s responsibilities during those early years.
