Pensions: Advisory Services

(asked on 24th February 2022) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will bring forward legislation proposals that prevent financial advisers from changing their recommendations on the benefits of transferring a defined benefit pension scheme, dependent on whether that adviser is likely to financially benefit from a product.


Answered by
John Glen Portrait
John Glen
Paymaster General and Minister for the Cabinet Office
This question was answered on 4th March 2022

HM Treasury works closely with the Financial Conduct Authority (FCA), who are the independent regulator of the UK’s financial advice market, to ensure that this market works well, competitively and fairly for both firms and consumers, and that the advice being provided is of high quality.

Since 2015, the FCA have consulted on and made several changes to their rules around pension transfer advice. This reflects their commitment to delivering on their consumer protection and market integrity objectives by taking strong and robust action to raise the standard of the advice consumers receive. The FCA do not tell firms what advice to give their clients but expect firms to give personal recommendations that are in the best interests of their clients, by considering each client’s individual circumstances based on the most recently provided evidence.

On 1 October 2020, new FCA rules came into effect to ensure costs and charges are clearly disclosed and that charges are not contingent on a positive recommendation to transfer. This removes any incentives for an advice firm to act in their own interests, rather than their client’s, and places a value on professional advice, regardless of whether it results in a transaction.

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