FSA issues TCF warning on protected rights

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The FSA is warning firms to ensure pension savers receive suitable advice when tranferring protected rights into a SIPP.

It says advice must be based solely on customer need to ensure the right decision is made by each individual. Areas the regulator says it will focus on include whether there is a genuine need for the investment flexibility offered by a SIPP, explaining the costs involved, and how these recommendations meet the needs of a customer and how they approach risk. Andrew Sykes, head of retail policy and unfair contractual terms at the FSA, says: “Decisions relating to contracting out of the state second pension or transferring pots of protected rights are important and can have a significant i...

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