The FSA has reminded firms of the complexity of DB pension transfer decisions for consumers, following evidence the number of direct transfers made without advice is increasing.
In November last year, the FSA highlighted the intricacy of conducting DB pension transfers using direct offers, where members of the schemes receive promotional information packs encouraging them to transfer out without advice.
The FSA says it has recently become aware of a number of firms that are involved in conducting or considering these sorts of transfers.
However, it warns such a decision is likely to be too complex for a consumer to make without specialist knowledge, as there are many considerations and risks involved.
“The FSA wishes to stress its belief that it is very difficult to produce a direct offer pack for a DB pension transfer that meets its financial promotions requirements, including the need to be fair, clear and not misleading,” the regulator says.
It is reminding firms that when reviewing promotional material, it will start from the presumption that such transfers are not suitable and will “enhance its supervisory scrutiny of these activities”.
Enforcement action will be considered where failings are identified, it warns.IFAonline
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